The 18-year-old, who claimed nine World Cup wins on the way to the title last season, travelled across Germany for the seventh competition of the season ranked fourth in the overall standings.
Hendrickson won the second event in Sochi but has struggled on her four outings since finishing seventh twice and 11th and then fifth in the two competitions in Schonach last time out.
However she was back to her best in Hinterzarten and produced the biggest jump of the second round to move from second after round one to first with World Cup leader Sara Takanashi second.
Takanashi recorded the best leap of round one, 99m, but was forced into a lengthy delay after Iraschko fell on her landing before appearing to get her left leg caught in the snow.
She was stretchered off the slope before Takanashi's jump that, despite being the biggest, ranked her third behind Coline Mattel of France and then Hendrickson.
Takanashi threatened to steal the win from both after jumping 98m second time out for an overall total of 242.4 but American Hendrickson had other ideas.
She went even better, recording a leap of 98.5m for a winning total of 243.6 with Mattel unable to respond to either as the last jumper out with her effort of 97.5m giving her 240.4 for third.
Takanashi still leads the overall World Cup standings with 570 points with Hendrickson now second with 421, Mattel third with 408 and Iraschko fourth with 390.