The contemporary thriller will be executive produced by Flanagan, Trevor Macy, Justin Falvey and Darryl Frank.
The project marks a reunion between Gugino and director Mike Flanagan, who recently completed work on the Stephen King adaptation Gerald's Game, also for Netflix.
"So thrilled to be working with @carlagugino again!" Flanagan tweeted.
"DITTO @flanaganfilm! Very excited to be a part of this new incarnation of #TheHauntingOfHillHouse. Let the games begin," the actress replied.