Hiddink had been linked with a return to Stamford Bridge earlier this summer before Villas-Boas became the seventh Chelsea manager since Roman Abramovich became owner in 2003.
The Turkey coach has suggested that Abramovich should follow Manchester United's example and give the former Porto manager time.
"If you look at Manchester United, they are the example that clubs need stability," Hiddink said. "This is what Chelsea need as well. I have told Roman that and I think they are convinced as well now."
The Dutchman also believes that Villas-Boas's relative inexperience won't be a problem ahead of the 33-year-old's first season at the Premier League club.
Hiddink added: "It is a very young age for Villas-Boas to be Chelsea's manager, but he has already proved at Porto he is good."