The Tykes confirmed the signing of Dagnall, 25, on Friday morning after finalising the deal on Thursday afternoon.
"Chris is a very good player and I'm sure he will endear himself to the Barnsley supporters because he is a workaholic," said Hill, speaking on the Tykes' official website.
"He's a no-risk signing as myself and the management team know him well from our time at Rochdale.
"He's definitely value-for-money and he's the type of player that fits in perfectly to what we're trying to achieve at this football club."
Dagnall nettted 13 goals in 68 first-team appearances for the Iron, after joining on a Bosman transfer from Rochdale in 2010.
The Yorkshire club have paid an undisclosed nominal fee for the forward, whose departure freed up space in the wage budget to fund the signing of the in-form youngster Connor Jennings from Stalybridge Celtic.
Dagnall has signed a two-and-a-half year contract at Oakwell, but is ineligible to make his debut for the Yorkshire side in Saturday's FA Cup tie against Swansea having already featured in the competition for the Iron.