Leno snuck up behind Hall while the comedian was delivering his monologue Wednesday night.
"We've known each other, what? 35 years? We've been through a lot together -- good, bad."
"You've always been that big brother there for me. Giving me too much advice sometimes," Hall said.
Leno then took an envelope out of his pocket, prompting Hall to quip: "Money? Because you owe me $20."
"No," Leno replied, adding, "For some reason they thought I should be the best person to deliver this."
He then announced "The Arsenio Hall" had been picked up for a second season.
A surprised-looking Hall asked how Leno had heard the news before him.
"The guy in the taco truck told me," Leno said, adding, "Good luck my friend."
Hall then said he hopes Leno will return as a guest on the show.
"Actually, on the second season, I'm going to be hosting. I didn't tell you that," Leno joked, hugging Hall before leaving the stage.
"Wow, this is cool. We're getting ready to party for another year," Hall said.
The syndicated nightly show premiered in September and is watched by about 6.7 million viewers weekly, EW.com said.
Leno left his post as host of "The Tonight Show" after 22 years this month so Jimmy Fallon could take it over.