The revelation suggests that Morgan knew a fair amount about how the shady practice was carried out. Morgan previously testified late last year saying he'd only been aware of phone hacking in general terms.
BBC quiz show host and television news presenter Jeremy Paxman told a media ethics inquiry that Morgan told him how phones were hacked over lunch at the headquarters of the Mirror newspaper, when Paxman was the editor in 2002.
Paxman said that Morgan "turned to me and said, 'Have you got a mobile phone?"'
"I said, 'yes,' and he asked if there was a security setting onthe message bit of it. ... I didn't know what he was talking about.
"He then explained the way to get access to people's messages was to go to the factory default setting and press either 0000 or 1234 and that if you didn't put on your own code, (in) his words, 'You're a fool."'
Paxman testified before Lord Justice Brian Leveson, who is sifting through the fallout of the scandal over unethical and illegal behavior at Rupert Murdoch's News of the World newspaper, which Morgan briefly edited before moving to the Mirror.
Morgan responded to Paxman's testimony on Twitter, saying, "Right - that's the last time I'm inviting Jeremy Paxman to lunch. Ungrateful little wretch."
The Associated Press contributed to this report.