The North Korean dictator ordered the hotline at the truce village of Panmunjom to be reopened at 6.30am.
Officials from the two Koreas exchanged their names and examined their communications lines to make sure they were working during a 20-minute conversation, Seoul's Unification Ministry said.
The hotline was shut down by North Korea in February 2016 in retaliation against the closing of a border factory town the two Koreas jointly operated.
The North's decision to open the border phone line came a day after South Korea proposed high-level discussions amid a tense standoff over North Korea's missile and nuclear programmes.
It followed Mr Kim's New Year address, in which he said he was open to speaking with the South and would consider sending a delegation to the Winter Olympics to be held just across the border in Pyeongchang in February.
Hours before the communications channel was reopened, Mr Trump, who has mocked Mr Kim as "Little Rocket Man", again ridiculed the North Korean dictator on Twitter over a warning from Mr Kim that he had a nuclear launch button within easy reach.
"Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!" Mr Trump tweeted.
The White House defended that tweet on Wednesday afternoon, saying Americans should be concerned about the North Korean leader's mental fitness, not their president's.
Asked whether Americans should be concerned about the president's mental fitness after he appeared to be speaking so lightly about nuclear threats, White House spokeswoman Sara Sanders told a regular news briefing:
“The president and the people of this country should be concerned about the mental fitness of the leader of North Korea.
“He's made repeated threats, he's tested missiles time and time again for years, and this is a president who's not going to cower down and who's not going to be weak and is going to make sure that he does what he's promised to do and that is stand up and protect the American people.”
Mr Kim's latest announcement, which was read by a senior Pyongyang official on state TV, followed a South Korean offer on Tuesday of high-level talks with North Korea to find ways to cooperate on February's Winter Olympics in the South and discuss other inter-Korean issues.
Ri Son-Gwon, chairman of the state-run Committee for the Peaceful Reunification, cited Mr Kim as welcoming South Korea's overture and ordering officials to reopen the communications. Mr Ri also quoted Mr Kim as ordering officials to promptly take substantial measures with South Korea out of a "sincere stand and honest attitude," according to the North's state TV and news agency.
US officials said Washington would not take any talks between North and South Korea seriously if they did not contribute to denuclearising North Korea.
Nikki Haley, the US ambassador to the United Nations, warned North Korea against staging another missile test and said Washington was hearing reports Pyongyang might be preparing to fire another missile.
A spokesman for the Chinese Foreign Ministry, Geng Shuang, said both sides should seize the Olympics as an opportunity to improve ties and make concrete efforts towards alleviating tensions.
"All relevant sides should grab hold of this positive trend in the Korean peninsula and move in the same direction," Mr Geng said.
Additional reporting by agencies