Waterboarding, an interrogation method which involved simulated drowning, is considered inhumane by many human rights organisations.
The CIA acknowledged this week that it had used the practice on three al-Qaeda suspects captured in the aftermath of the 11 September 2001 attacks.
'Unique' circumstances
Hayden told the committee that the circumstances that led to the use of harsh interrogation techniques five years ago were "fairly unique" and "historic".
He said they were spurred by a belief in the intelligence community that more attacks were imminent and that there was a poor understanding of al-Qaeda.
However, since then the legal landscape has changed following a supreme court decision about detainee rights and new laws and policies about how they are treated, Hayden said.
He also acknowledged that private contractors had been used in the interrogations, but said they were "bound by the same rules in force on the officers of the CIA".
'No investigation'
Also on Thursday Michael Mukasey, the US attorney-general, said that he would not investigate whether US interrogators broke the law when waterboarding people accused of terrorism following the September 11 attacks.
"Whatever was done as part of a CIA programme at the time that it was done, was the subject of a department of justice opinion through the Office of Legal Counsel and was found to be permissible under the law as it existed then," Mukasey told the House Judiciary Committee.
The three al-Qaeda suspects are Khalid Sheikh Mohammed, Abu Zubaydah and Abd al-Rahim al-Nashiri.
Mohammed has claimed to be the operational mastermind behind the September 11 attacks in the US, while Abu Zubaydah is alleged to have been an aide to Osama bin Laden, the al-Qaeda leader.
Al-Nashiri is said to have been the operational commander of the suicide attack on the USS Cole in Yemen in 2000.
The justice department has long resisted exposing the Bush administration and its employees to criminal or civil charges or even international war crimes if waterboarding is declared illegal.
On Wednesday the White House said that George Bush, the US president, could authorise waterboarding for future terror suspects in certain situations, including "belief that an attack might be imminent".
The president would first consult with the attorney-general and intelligence officials before authorising its use, a White House spokesman said.