The flight took off from Blenheim at 7:20am (1820 GMT) on Friday and the pilots sent a distress call at 7:40am. The plane landed at Christchurch shortly after 8am.
Neither pilot was seriously hurt and they were able to land the plane safely. They were taken to Christchurch hospital but their wounds were not life-threatening.
One passenger and the woman arrested were also treated for minor cuts.
The assailant tried to tamper with the controls of the plane as it was coming in to land at Christchurch and was only disarmed when the plane hit turbulence, police said.
Police with dogs boarded the plane and arrested the 33-year-old woman, who is originally from Somalia.
She was later charged with hijacking and wounding with intent to cause grievous bodily harm and was due to appear in court in Christchurch on Saturday.
The plane was left on the runway while a bomb squad was called in, but no bomb was found aboard, Dave Cliff, Canterbury district commander superintendent, said.
Christchurch Airport was closed to all flights for about three hours after the incident.
In a statement released soon after the drama, Air New Zealand said it would review its security procedures.
"Today's incident, although a one-off, has naturally given us cause to conduct a thorough review of our safety and security systems and processes on regional domestic flights," said Bruce Parton, general manager for short-haul airlines.
Passengers taking domestic flights out of Blenheim airport are reportedly not subject to security checks, and hand luggage is not scanned.
The 19-seater Jetstream planes are used on short-haul regional flights by national carrier Air New Zealand and have only curtains separating the cockpit from the passenger area.