Diplomatic relations between the two countries were broken off in 2011, after an Islamist mob attacked the British embassy in Tehran.
Relations however have slowly warmed since the election of President Hassan Rowhani last year, with both countries appointing non-resident charges d’affaires and officials paying each other a series of visits.
As the West turns to Tehran to seek help in dealing with the crisis in Iraq, Mr. Hague said on Monday that he had spoken to his Iranian counterpart Mohammad Javad Zarif at the weekend.
“He said that there was a case for a further step forward in our bilateral relations,” Mr. Hague told parliament. “I have discussed that with him, and I shall have something more to say about our discussions imminently.” The British foreign minister was expected to address parliament again on Tuesday morning.