SOURCE: AL JAZEERA NEWS
The hotline, which was suspended by the North in February 2016, was restored at 3pm local time (06:30 GMT) on Wednesday at the border village of Panmunjom.
South Korea's Unification Ministry said North Korea made preliminary contact and officials examined whether the phone lines were working well. The conversation lasted 20 minutes, the ministry said.
North Korea said its leader Kim Jong-un ordered the restoration "to contact South Korea regarding a right time for talks and sending a delegation" to the Winter Olympics set to take place in South Korea next month.
Rin Son Gown, chairman of the North Korean reunification committee, said North Korea would engage with the South in "a sincere and honest" manner.
Wednesday's phone call comes amid a tense standoff over North Korea's missiles and nuclear programme.
The tentative rapprochement began when Kim, in his New Year's address, said he was "open to dialogue" with South Korea and expressed an interest in sending athletes across the border to compete in Pyeongchang.
South Korea was quick to welcome the gesture and proposed to hold talks on January 9.
However, President Moon Jae-in said any improvement in relations must go hand in hand with steps towards denuclearisation.
But Kim, in his New Year address, vowed to push ahead with "mass producing nuclear warheads and ballistic missiles for operational deployment in 2018".
That was in defiance of fresh UN sanctions imposed last month.
Kim also warned US President Donald Trump that he has a "nuclear button" on his table.
Graham Ong-Webb, a research fellow at the S Rajaratnam School of International Studies in Singapore, said it was "very unlikely" the North would compromise on its weapons programmes.
"We need to have very modest expectations for the upcoming dialogue," Ong-Webb told Al Jazeera.
"The content of any ensuing conversation between the North and the South will not be about denuclearisation but about arms control, and trying to get the North to behave itself, and not to proliferate and build an excessive nuclear arsenal."
US officials have dismissed the prospect of meaningful talks between the two Koreas.
Nikki Haley, the US ambassador to the UN, said any inter-Korea dialogue would be a "band-aid" unless the talks did "something to ban all nuclear weapons in North Korea".
Heather Nauert, a spokeswoman for the US state department, also warned that Kim "may be trying to drive a wedge of some sort between" the US and South Korea.
China, however, has described the prospect of inter-Korea talks as a "positive message".