Hague spoke by phone with Iranian Foreign Minister Javad Zarif to discuss issues ranging from upcoming talks in Geneva on the Syria crisis to the implementation of Iran's nuclear deal with Western powers.
Hague used his official Twitter account Tuesday to say he looked forward to finding ways to establish a better relationship with Iran.
"Foreign Minister [Zarif] and I agreed to continue step-by-step improvement of U.K.-Iran contacts," he stated.
The British government in November appointed Ajay Sharma as its charge d'affairs to Iran so it could have a more open relationship with Tehran.
Bilateral ties were disrupted following a November 2011 attack on the British Embassy in Tehran.
The European Parliament in December sent a five-member delegation to Iran to re-establish bilateral ties with Iran.
Iranian President Hassan Rouhani pledged to establish better ties with the international community when he was sworn into office in August.