Suarez scored 31 goals in 33 games for Liverpool last season but underwent knee surgery last month and missed Uruguay's opening 3-1 defeat by Costa Rica.
"We believe Luis Suarez will come back and that will be a big boost for them, not just as a player but as a sort of confidence booster for the whole team," Hodgson told reporters in Rio before the squad left for Sao Paulo.
"Of course, we would like to think that as a team we can keep him quiet but I'm sure he's got other ideas," he added.
"We know how good he is. We know what he can do and our players will have to make certain, like they do when they play against Liverpool, that they deal with it."
England and Uruguay lost their opening games and their clash is vital to their chances of avoiding an early exit.
Suarez said this week that he was 100% fit and Hodgson knows exceptional players like him can lift an entire team with their performances.
"We saw (Diego) Maradona do it with Napoli all those years ago," the England coach said.
"Napoli had never won anything serious in Italy then suddenly Maradona pitches up and they become champions of Italy and they won the UEFA Cup."
Hodgson defended his striker Wayne Rooney, who has yet to score a World Cup goal.
British media have argued incessantly about where Rooney should play, and his critics say he does not deserve a place in the starting lineup.
"Wayne worked very hard like the rest of the team (in England's opening 2-1 defeat by Italy)," Hodgson said.
"I was more than satisfied with Rooney's performance against Italy," he told reporters at Sao Paulo's Corinthians arena, where the match will be played.
"It was interesting to get the statistics back and find out that he ran more than any other England player, had more sprints than any other England player, which maybe wasn't always evident to people watching the game."
FIFA statistics showed Rooney covered more than 11.2 kilometres (seven miles) during the match, compared with a team average of 9.2km.
But in his earlier comments made in Rio, Hodgson would not be drawn on what role Rooney would play against Uruguay.
"As you know, in all the time we've been together I never give teams away before I've spoken to the players," Hodgson said.
"At the moment, the players don't know what team I'm going to select on Thursday, so I've got no intention here, unfortunately, of saying he will or he won't play."