Daniel Levy, the Tottenham chairman, said in a statement on the club's official website that he had told Hoddle of his decision on Sunday evening.
"Following two seasons of disappointing results, there was a significant investment in the team during the summer, in order to give us the best possible chance of success this season," the statement said.
"Unfortunately, the start to this season has been our worst since the Premiership was formed.
"Coupled with the extremely poor second half to last season, the current lack of progress and any visible sign of improvement are unacceptable.
"It is critical that I, and the board, have absolute confidence in the manager to deliver success to the club.
"Regrettably we do not. It is not a decision we have taken lightly. However, we are determined to see this Club succeed and we must now move forward.
"Glenn occupies a special place at this club. Today's decision in no way detracts from the fact that he was one of our greatest players.
"He will always be welcome at White Hart Lane. I should like to personally thank him for his determination and commitment and wish him well.
"We shall be thorough in our search for a new manager. It is a crucial appointment and we shall take the time necessary to make the best choice."
David Pleat will take over as caretaker manager and Chris Hughton will serve as first-team coach while a new manager is sought.