The supremely talented and versatile back, a product of the Warriors Academy, first burst into the senior team during the 2007/08 season when he made his Guinness Premiership debut against Bath Rugby.
The 23-year-old, comfortable playing at full back, wing and centre, has made a total of 47 appearances for Warriors and scored 57 points, including nine tries.
Pennell's commitment, determination and professionalism have all been praised by Worcester boss Hill who believes the Worcester born and bred back is the right person to lead the team forward.
"Chris is a very mature, intelligent and bright young rugby player with a big future ahead of him," said Hill, who is also due to name his vice captain in the next 24 hours.
"He speaks with authority and it became very clear to me very quickly that the other players in the squad respected him and always listened to what he said.
"Chris is a local lad who has been through the Worcester system, is clearly a fantastic player and has a huge affinity with this club and really wants to bring success to Sixways.
"This year is a fantastic opportunity to ensure that everyone has a voice and everyone in the 33-man squad can step forward and contribute," added Hill.
"We now have a young captain who I believe will help to bring a lot of the young players forward and give them the confidence to contribute. Chris can be a very good bridge between the senior group and the younger players.
"This is a new start and I believe that having a new captain will benefit the club and that Chris will put his own mark on the captaincy.
"I have spoken to Chris at length and I know he will go away and work out how he is going to approach this. He will put his mark on this group of players and I am excited to see how he takes us forward."
Pennell replaces Pat Sanderson who has captained the club for the last six seasons and Hill was full of praise for the former England international who he insists will still have a massive role to play for Warriors.
"Everybody that's watched Warriors over the last six years has seen that Pat has given absolutely everything he has to the role," said Hill.
"He has contributed so much as both a player and captain under difficult circumstances when under pressure and at the wrong end of the table.
"Throughout hard times, Pat always led by example and put his body on the line. He would never ask anybody to do something he wouldn't so himself.
"Pat has always maintained huge enthusiastic, something that has again been evident in pre-season this year, and has always created a great spirit with the club.
"I have spoken to Pat about his decision and I know will give Chris his full support and continue to be a key performer for Worcester Warriors in the coming years."