Australian middle-order batsman Hodge scored 123 and shared an invaluable 204-run fourth wicket stand with Michael Clarke (93 not out) to help Australia reach 358-5 after electing to bat.
The Netherlands were then unable to cope with the Australian bowling attack and were dismissed for 129 in 26.5 overs. Dan van Bunge topscored with 33, while Darron Reekers (25) and Peter Borren (24) were other notable scorers.
Left-arm spinner Brad Hogg was the pick of Australian bowlers with 4-27.
Paceman Glenn McGrath finished with 2-33, to complete fifty wickets in the World Cup.
The 37-year-old paceman now need another six wickets to overhaul Pakistan's left-arm paceman Wasim Akram's World Cup best of 55.
Left-arm paceman Nathan Bracken finished with 2-33 to seal an emphatic win for Australia whose final group match will be against South Africa on March 24.
South Africa and Scotland, the two other sides in Group A, meet each other on Tuesday with the top two advancing to the Super Eight stage.
Australia owed their total to Hodge who rescued Australia from a precarious 116-3 in the company of Clarke as the two benefitted from five dropped catches by the Dutch fielders.
Hodge was finally dismissed in the 48th over, bowled by Peter Borren.
He hit eight boundaries and seven sixes during his enterprising 89-ball knock.
His previous best one-day score was 99 which came against New Zealand at Melbourne during the tri-series last month.
Clarke missed his hundred by seven runs, hitting six boundaries and three towering sixes during his 85-ball knock.
Australia looked to be in a bit of bother for a brief spell when they lost opener Matthew Hayden (29), Adam Gilchrist (57) and skipper Ricky Ponting (23) to be at 116-3 in the 21st over.
The Dutch attack bowled a better line and length than they did against South Africa who piled up 353-3 in 40 overs on Friday in a match which saw Herschelle Gibbs smash six sixes in an over.
But their fielding left a lot to be desired as they dropped two chances off Hodge and two off Clarke, to allow the pair to score 130 runs in the final ten overs.
Shane Watson hit a four and a six to finish with 12 not out. Micheal Hussey failed for a second match in a row as he managed just two.
Earlier, Gilchrist and Hayden had put on 73 by the 12th over when paceman Tim de Leede had both caught in the outfield. De Leede was the pick of the Dutch bowlers with 2-40.
Ponting, who hit a brilliant 113 in his team's 202-run win against Scotland in Australia's first match, was let off at 23 but the Australian skipper failed to make the most of his lifeline and was smartly snapped up by Ryan ten Doeschate off his own bowling.