The former world No. 1 -- who retired in 2002 and was not 100 percent because of a hip ailment -- got off to a fast start against Pennetta, who rallied to win a tiebreaker in the second set, then cruised through the third to win the match, 1-6, 7-6 (7-2), 6-2.
"As a player and a competitor, you try to overcome things like that and still play until the end of the match," Hingis said after the match. "I don't want to take anything away from Pennetta, she played a great match. I was able to compete with her."
In Friday's other semifinal, Luci Safarova topped Dinara Safina, 6-4, 6-2.
The winner between Safarova and Pennetta on Saturday will earn $28,000.