South Korea confirmed it had received a call from the North at 15:30 local time on Wednesday.
The North Korean leader had earlier said he was open to dialogue with Seoul and to sending a team to the Winter Olympics in the South next month.
The two nations have not held high-level talks since December 2015.
North Korea cut off the communications channel shortly afterwards, refusing to answer calls, according to officials in the South.
A North Korean official announced the hotline's reopening in a televised statement.
Instead of a senior newscaster, the chairman of the Committee for the Peaceful Reunification of the Fatherland, Ri Son-gwon, made the statement, saying he was speaking "upon authorisation of Kim Jong-un".
The initial call was brief as checks are still being carried out on the line, according to South Korean officials.
North Korea said the aim would be for the two nations to discuss the practical issues around sending a North Korean delegation to the Winter Games in Pyeongchang.
The press secretary for South Korea's President Moon Jae-in said the restoration of this communications channel was "very significant".
"It creates an environment where communication will be possible at all times," he said.
In the press, there was skepticism. "Kim's New Year's address is a highly calculated move to fuel internal division in South Korea," said daily newspaper JoongAng Ilbo. "Pyongyang may have decided on its peace offensive to buy time until the completion of its nuclear weapons programme."
Hankyoreh newspaper also voiced caution: "Kim has not budged an inch from his previous reckless and hard-line stance on the development of nuclear weapons and missiles."
But the "surprising New Year's address could open the door to peace", it added.