Hiller, 54, who will coach Los Angeles for the remainder of the season, was in his second season as an assistant after holding similar titles with the Detroit Red Wings (2014-15), Toronto Maple Leafs (2015-19) and New York Islanders (2019-22).
This is his first head coaching job in the NHL.
"Jim is a well-respected member of our staff who is familiar with our players," Blake said. "We are confident in his ability to lead our team effectively during this pivotal time."
A former forward, Hiller had 20 points (eight goals, 12 assists) in 63 NHL games from 1992-94 for the Kings, Red Wings and New York Rangers.
McLellan took responsibility for Los Angeles' slump following a 5-3 loss to the Buffalo Sabres on Jan. 24, which was the Kings' 12th loss in 14 games (2-7-5).
He was asked if he were concerned about his job security and acknowledged it was a "very fair question" six days after Blake had said McLellan would remain coach for the rest of the season.
"If I was sitting in your seat and you were standing here, I'd ask you that," McLellan said. "I'm responsible for this. And when you looked at the team that played the first, what would we call it, 25, 30 games if you will, it doesn't look like the team that's playing right now.
"And I’m responsible for it. Our staff is doing what we can or what we believe we can to get them to turn it around. We're trying different things at different times. But I'm going to keep pushing away. I'm going to try and push buttons, poke people, praise people, look at how we do things. Our numbers, our underlying numbers, say we're more the first-half team than the second-half team, but the winning column doesn't say that, and that's all that matters. So it's a very fair question."
The same day, Los Angeles captain Anze Kopitar defended McLellan and the rest of the coaching staff.
"I mean, it comes down to this room," Kopitar said. "They give us a plan, they give us the structure, the motivation or the kick in the [butt]. It is what it is, but it’s about the guys that have to bring it out on the ice and make things happen."
Blake had ruled out an in-season coaching change Jan. 18.
"Like I said, our philosophy here for the past three, four years is on the structure and the system and the design, in the buy-in of the players, and he (McLellan) has gotten that from the players," Blake said then. "I'm going to rely on the players and the leadership to get us out of that.
"I mean, we're sitting here at halfway point at 50 points. You always say 100 points gets you in. We're a game or two off the pace where we were last year. We were really good early on but slipped."
Following the NHL All-Star break and their bye week, the Kings next play against the Oilers on Feb. 10.
McLellan is the sixth NHL coach fired this season, joining Lane Lambert (New York Islanders), D.J. Smith (Ottawa Senators), Jay Woodcroft (Oilers), Dean Evason (Minnesota Wild) and Craig Berube (St. Louis Blues).
NHL.com independent correspondent Dan Greenspan contributed to this report
