The Cubs acquired Hill, 33, from the Reds for cash considerations. He was playing for Double-A Pensacola, batting .195 with one home run and five RBIs in 14 games.
"He'll probably catch most of the time if not all of the time," Cubs manager Dale Sveum said.
Castillo has a mild sprain of the MCL in his right knee, and is expected to miss 4-7 days, depending on how he responds to treatment. Castillo had an MRI on Saturday to determine the injury. He will be re-evaluated Tuesday.
The Cubs are already short-handed at catcher with Soto going on the disabled list Saturday because of a tear in the meniscus in his left knee. He underwent arthroscopic surgery on Friday and is expected to be sidelined at least three weeks. Clevenger, the Cubs' backup catcher, is currently on the DL with a rib-cage injury and was to start taking batting practice on Saturday or Sunday. He is ahead of schedule in his rehab but isn't expected to be ready until the Cubs return from Pittsburgh on May 27.
"We've got a catcher injury of the day epidemic going around," said Theo Epstein, Cubs president of baseball operations. "We went from catcher being a position of relative depth to sort of relative scarcity for us, so we had to scramble.
"Koyie Hill made a lot of sense," Epstein said. "He knows Dempster, he knows half of the pitching staff. He can step in for this fill-in assignment without much of a learning curve."
Rookie Blake Lalli, who was hitting .178 in 20 games at Triple-A Iowa, was added to the roster on Friday and made his Major League debut.
Hill was in the Cardinals' camp this spring, but was released in late March. He went home for a month and considered his options.
"They have a brand new ballpark down there [in Pensacola], I was playing four, five days a week," Hill said. "[Former Cubs manager Jim] Riggleman was the manager, [Cubs hitting coach] Rudy [Jaramillo's] nephew was the hitting coach. It was about as good a situation as you could get."
Hill nearly quit baseball after suffering a hand injury, in which he cut his thumb and four fingers in a table-saw accident, in October 2007. How close did he come to retiring this time?
"I thought about it every day," Hill said. "Anybody who's thinking clearly would think about it every day. I think that's natural. I've got a really really good support system and I really appreciate it. It's not the first time we've had to go through something.
"I've had a nice run and nothing to be ashamed of," he said. "But it's the same thing as the [hand] injury. It feels like it's going to be an impossible task, but you've got to want to play and I kept showing up at the ballpark every day and now I'm catching one of my best friends tonight. It was worth it."