Hill produced a lap of 1:28.477 which was eight hundredths of a second faster than Alastair Seeley (Tyco Suzuki) with Alex Lowes (WFR Honda) next fastest.
It was a difficult session for Luca Scassa and Noriyuki Haga who both fell off although neither rider was hurt.
The session was red flagged when Shane 'Shakey' Byrne crashed at the Hairpin. He hurt his shoulder and is being assessed.
The rain then came to end the session.
MCE Insurance British Superbike Championship, Cadwell Park, free practice two:
1. Tommy Hill (Swan Yamaha) 1m:28.477s
2. Alastair Seeley (Tyco Suzuki) +0.800s
3. Alex Lowes (WFR Honda) +0.847s
4. Michael Laverty (Samsung Honda) +0.885s
5. Michael Rutter (MSS Bathams Kawasaki) +1.093s
6. Ian Lowry (Padgetts Honda) +1.105s
7. Chris Walker (Pr1mo Bournemouth Kawasaki) +1.152s
8. Danny Buchan (MSS Bathams Kawasaki) +1.363s
9. Gary Mason (Pr1mo Bournemouth Kawasaki) +1.472s
10. Mark Aitchison (Splitlath Redmond Racing) +1.561s