The 21-year-old winger, who signed a new three-year deal with parent club Liverpool before his move to Bloomfield Road, spent last season on loan at Championship side Southampton.
"We've known for the past few weeks that this is the club I wanted to join," Hammill told the club's official website
. "There's been a lot of interest, but I met Simon (Grayson) a few weeks back and he comes across as very pleasant - and we decided this was the best club for me.
"He told me about his ambitions and plans for the season and I was in them, and that was enough for me.
"I'm trying to use it as a stepping stone for myself and also to get Blackpool where they want to."