Mark Robins’ men extended their good form in Sky Bet League One, rising further up the table.
United led twice in the game, as they provided Scunthorpe fans with a late Christmas gift - three points at Glanford Park.
Liam O’Neil gave United the lead before the hour mark as he showed immense composure to finish low into the far corner, following persistent play down the right from Rotherham loanee Richard Brindley.
Rochdale equalised less than 15 minutes later as a quick break saw Matty Done fire his 14th goal of the campaign with a tap-in from four yards.
Paddy Madden netted a second for United soon later, with an exquisite finish from point-blank range after controlling the ball well to beat two men in the box.
Robins made one change to the side which drew at Bradford on Saturday. Lyle Taylor came into the side in place of loan man Luke Williams, who was absent from the matchday squad.
Hakeeb Adelakun came off the bench to score a late equaliser at the Coral Windows Stadium and the teenage was again named among the substitutes.
United lined up in a 4-1-4-1 formation, with Isaiah Osbourne shielding the back four with Neal Bishop and Liam O’Neil in a central position in front of him, with Paddy Madden and Gary McSheffrey on the flanks, often providing support for lone striker Taylor.
Referee Tony Harrington was in charge of the Iron’s 4-0 win at Spotland last season as he sent off two of the home side’s players.
There was an early stoppage when the game was halted after four minutes when Dale’s Matty Lund was stretchered off after a collision in the box where he appeared to injure his shoulder.
Tomasz Cywka had the first chance as he strode inside from the right flank and hooked his left foot around the ball from 18 yards and Sam Slocombe reacted to get down well and tip it past his post.
Hill’s men had the better opening quarter of an hour but the Claret and Blue grew into the game as Madden went close first and McSheffrey delivered a deadly cross which was not met.
The visitors’ Ian Henderson broke dangerously down the left, nutmegging his man and charging into the box but excellent covering by Isaiah Osbourne saw the danger averted.
Taylor was hauled down on the halfway line in a full-blooded challenge and referee Harrington waved away claims as Cywka surged forward and fired over from 20 yards.
The best piece of United’s place was after 33 minutes, when Madden made space for himself on the halfway before sending a sublime ball through to O’Neil, who controlled it, gave it to McSheffrey and the wideman arrowed a low cross into the box and the Rochdale defenders eventually cleared their lines.
Madden was at the centre of the Iron’s dangerous play and he slid the ball through to Bishop and a backheel from the captain nearly fell into the path of Taylor. Robins’ men became increasingly confident as half-time approached.
With five minutes of stoppage time indicated by the fourth official, Marcus Williams ventured forward through the middle, playing a one-two with Taylor before losing momentum but United continued to press and show their menace.
There were penalty appeals before the break as Madden intercepted a back-pass and former Iron and current Dale stopper Josh Lillis looked to have clipped the Irishman on the left-hand side of the box, but the man in-charge pointed for a goal kick.
Hill’s men started on top in the second half as Glanford Park became increasingly foggy.
Cywka had another effort stopped by Slocombe and Matty Done’s low cross into the box was only met by Iron defenders.
Henderson half-volleyed from 25 yards, into the arms of Slocombe, before McSheffrey was nearly on the score sheet at the other end as a Rochdale defender intervened.
There was a moment of panic as a misplaced back-pass saw Sam Slocombe rounded by Stephen Dawson and United’s defence got back terrifically to put their bodies on the line. First Llera, then Boyce, a scramble in the box eventually saw the ball cleared up field, where Taylor sent a looping shot into Lillis’ arms from 20 yards.
The opening goal from the West Brom loan man came in the 59th minute, after good work from Brindley down the right saw Rochdale fail to clear and it fell to O’Neil, who coolly slotted home his first goal for Scunthorpe.
Done was fouled on the edge of the box shortly after O’Neil netted and Henderson struck it low into the wall, much to the relief of the still-ecstatic home fans.
McSheffrey lofted the ball forward and, what looked like a lost cause, Taylor chased it down to earn a corner.
The resulting set piece was cleared and the visitors counter-attacked down the right as Dawson squared the ball across goal for Done to put the visitors level from close-range with 20 minutes left on the clock.
United continued their search for a second, going close twice before Madden finally found an opening for his 12th of the season.
O’Neil put in a cross and the Irish forward controlled it before nonchalantly beating two men and firing past the helpless Lillis.
Former Scunthorpe loan man Reuben Noble-Lazarus came on for Rochdale, as they piled on the pressure in search of an equaliser. But United held on, even coming close to a third when Miguel Llera’s free-kick hit the side-netting.
Scunthorpe United: Slocombe. Brindley, Boyce, Llera, M Williams, Bishop, Osbourne, O'Neil (McAllister, 80), McSheffrey, Madden, Taylor (Adelakun, 87).
Substitutes not used: Olejnik, Canavan, Hawkridge, Wootton, Davey.
Rochdale: Lillis, Rafferty, Bennett (Noble-Lazarus, 86), Eastham, Lund (Cannon, 9), Dawson, Done, Cwyka (Andrew,70), Rose, O'Connell, Henderson.
Substitutes not used: Hery, Musangu, Allen, Camps.
Attendance: 4,004 (546 away).