The 57-year-old from Christchurch, who was appointed as a Member of British Empire (MBE) in 1981 and knighted in 1990, received his commemorative cap from ICC President David Morgan as ICC Chief Executive Haroon Lorgat looked on.
After the ceremony Hadlee said: "Obviously, I am delighted. I have been fortunate enough during my life in cricket to be acknowledged in so many different ways and they are all very special in their own rights.
"But when you are one of the 55 in the history of the game that goes back to the 1800s through to the 20th century and when you look at some of the players who have also been inducted, to be part of that particular elite group is something very special indeed. So I am very grateful to be recognised in that way.
"This honour is right up there with the others. So many fantastic players have been recognised, some that I have played against, others that I watched and read about as a youngster, and many others in the early 1900s that were legendary in their own right and fantastic role models.
"I have a lot of respect for this award as I understand what all the players in this particular group had to go through to be able to become champion players.
ICC President David Morgan said: "Sir Richard is without question one of world cricket's greatest all-rounders with 431 Test wickets and 3,124 runs. These numbers tell a story.
"Today is a proud day for New Zealand and Nottingham and it is an honour for me to induct Sir Richard into the ICC Cricket Hall of Fame."