The Infected Blood Inquiry is examining how thousands of patients came to be infected with HIV and hepatitis C through contaminated blood products from the 1970s to the early 1990s.
At least 3,000 people have died and many have been left with serious disabilities in what has been labelled the worst treatment disaster in NHS history.
Mr Hancock told the inquiry on Friday that resolving the matter of financial support and compensation was “long overdue”.
He said: “Should the inquiry’s recommendations point to compensation, then of course we will pay compensation.
“Sir Robert Francis’ review on compensation is there in order that the government will be able to respond quickly to that.”
The government announced on Thursday that Sir Robert Francis QC, who chaired the inquiry into the Mid Staffordshire NHS trust scandal, has been appointed to study options for compensation.
Some of those affected already receive payments through the England Infected Blood Support Scheme. The scheme has proved controversial due to a cut-off point that denies compensation to anyone infected after 1991.
Earlier this year, The Independent revealed that one victim had brought a judicial review against the government to challenge the cut-off date.
The health secretary also gave the inquiry his “commitment” that anyone already receiving support payments would continue to receive them for life.
Mr Hancock told the inquiry on Friday that the government had a “moral responsibility” to address the impact of the scandal, adding: “I think that resolving this problem, this whole tragedy and all that it has left behind, is long overdue.”
Des Collins, senior partner at Collins Solicitors and legal adviser to more than 1,500 people affected by the scandal, said: “My clients tonight will be breathing a huge sigh of relief.
“It may have taken some 40 years, but for the first time today we heard the UK government committing to paying due compensation to the infected and affected by this huge scandal, if recommended to do so when the inquiry reports. Bravo, Mr Hancock, for doing the right thing.
“The inquiry has heard week after week of truly harrowing testimony from living victims and relatives of those who have died. We’ve also seen how disparate the various support schemes paid to date have been between the countries of the United Kingdom. Fairness must prevail.
“We now go forward with renewed positivity and intend to work closely with Sir Robert and his team to achieve a just and lasting outcome.”
The independent inquiry into the contaminated blood scandal was launched in 2019 and is being led by former High Court judge Sir Brian Langstaff.
Two previous inquiries, the last one ending in 2015, were branded whitewashes by campaigners. In 2019, victims raised fears of a cover-up after it emerged hundreds of documents relating to the scandal had been removed by government officials and were missing.