But Hagel faced skeptical US lawmakers who voiced doubts whether the Iraqi troops were up to the task of rolling back the IS militants, after Washington's previous attempt to train the army over the past decade ended in failure.
"What is it that has changed? Or what did you learn from the fact that we haven't gotten it right in Afghanistan and we haven't gotten it right in Iraq?" asked Representative Loretta Sanchez, a Democrat from California.
Hagel said the circumstances were markedly different from the last US intervention in Iraq, including a Baghdad government that appeared ready to embrace Sunni and Kurdish communities and the threat posed by the IS group that had prompted an international response.
"This new minister of defense and this new government is reconstituting the leadership of the Iraqi security forces," Hagel told the House Armed Services Committee, referring to newly appointed defense minister Khaled al-Obaidi.
He cited Baghdad's announcement Wednesday that 36 army officers had been sacked, saying the move signaled reform "across the top" of the military.
"Those are fundamental changes," he said.
Hagel said the defense minister was creating a national guard that would empower Sunni tribes in western Anbar province, where the IS group has exploited local resentment of the Shiite-led government in Baghdad.
AIR STRIKES TO ACCELERATE
Once the Iraqi army was bolstered, the US-led air war would escalate, he said.
"And as Iraqi forces build strength, the tempo and intensity of our coalition's air campaign will accelerate in tandem," he said.
US commanders say the Iraqi army is still not ready to mount major operations to retake lost territory, and that has limited the air campaign so far, which has seen more than 800 strikes in Iraq and Syria since August 8.
American-trained Iraqi units collapsed in June in the face of an IS offensive in the country's second city of Mosul, with army soldiers in some cases throwing down their weapons in a panicked retreat.
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General Martin Dempsey, chairman of the Joint Chiefs of Staff, told the same hearing the Iraqi army had unraveled because of "corrupt leadership" and irrational fears that the IS group was "unstoppable."
US and coalition air strikes had stopped the IS group's advance and "we can recover from the shortcomings they (the Iraqi army) exhibited," he said.
Republican lawmakers sharply criticized the White House for ruling out sending US troops into combat and asked Dempsey if he would back the move if he deemed it necessary.
The four-star general said sending in small teams of US troops into combat with local forces remained an option to be considered, particularly when Iraqi and Kurdish forces eventually launch a sustained counter-offensive to seize back the city of Mosul or areas along the Syrian border.
"I'm not predicting, at this point, that I would recommend that those forces in Mosul and along the border would need to be accompanied by US forces, but we're certainly considering it," Dempsey said.
The general, however, said he and other top commanders did not favor ordering in a large ground force.
Dempsey warned of dire consequences if the Baghdad government failed to follow through on promises to bring Sunnis and Kurds back into the fold.
"I can predict for you right now, if that doesn't happen, then the Iraqi security forces will not hold together," he said.
In an expanding war effort, President Barack Obama last week approved an additional 1,500 troops to deploy to Iraq to advise and train local forces, roughly doubling the military presence to a total of 3,100 Americans.
Obama is asking Congress for $5.6 billion to fund the war, including $1.6 to arm and train Iraqi and Kurdish forces.
Of the $1.6 billion to equip the Iraqi troops, only 60 percent would be released initially until the Baghdad government provided at least $600 million of their own contributions, Hagel said, "because the Iraqi government must invest in its own security, and its own future."