The promotion of Hilditch, a former Test opener and vice-captain of the national team, defied calls for some new blood in the much-criticised selectors panel before Australia tries to regain the Ashes from England next season.
Hilditch, 49, has served on the panel since 1996, the year Hohns became the chairman.
Hohns announced his retirement on Tuesday, saying he needed to devote more time to his sports wholesale business.
But the long-time chairman had been under growing criticism over a series of selection choices, notably failing to use spinner Stuart MacGill and batsman Michael Hussey during last year's Ashes series, which Australia lost for the first time in 16 years.
Hohns' sudden resignation sparked calls for the Cricket Australia board to bring someone new in to run the selector's panel, with suggested candidates including Test great and former England selector Rod Marsh.
Other contenders included South Australian captain and former Test batsman Darren Lehman, 36, long-time first class coach Steve Rixon, 52, and Victorian Dean Jones.
But Cricket Australia chairman Creagh OConnor said the choice of Hilditch had the full backing of the board.
"He is an experienced member of what has been a successful selection panel," O'Connor said, calling Hilditch an "excellent communicator" who has a very good rapport with the players.
Hilditch said that he was "very excited" by the appointment.
"Trevor has done a fantastic job in the time he has chaired the panel and I can only hope to perform to a similar level," he said.
"I have no doubt that it is a challenging role and there will be many tough decisions ahead, however, our objective is to maintain Australias position at the top of world cricket by selecting the best teams as we see fit," he said.
Cricket Australia said it was still looking for a fourth selector to join Hilditch, David Boon and Merv Hughes.
Hohns played a pivotal role in helping Australia remain the world's top Test and one-day international team, with a Test record of 35 series won, five drawn and just six lost.
Under Hohns' chairmanship, the selectors brought 39 players into the Test team and 46 into the one-day squad.
But over the past year, there has also been growing criticism of the panel's choices.
Last month Test batting great Mark Waugh said Hohns had "lost his way" after a decade in the job and should step aside.
Waugh said a constant string of changes had been "confusing" for the team and led players to focus more on keeping their spot than contributing to Australia's performance.
Among the controversial decisions under Hohns were the team picks during last year's Ashes tour to England, the axing of batsman Brad Hodge from the just-finished tour of South Africa and the on-again-off-again handling over the past year of quick Brett Lee and batsman Michael Clarke.
Possible candidates to join the selectors panel, according to Australian media reports, now include Rixon, former Test spinners Ray Bright, 51, and Tom Hogan, 49, and ex-keeper Brian Taber, 65.