Abed Rabbo Mansour Hadi named Mohammed al-Maqdashi as defence minister to replace Mahmoud al-Subaihi who has been detained by the rebels for years, the government-run Saba news agency reported.
Hadi had not replaced the detained minister since 2014, when the Iran-backed Houthi rebels overran the capital Sanaa.
The naming of a replacement comes days after neutral Oman intervened in an attempt to secure Subaihi's release.
Hadi also named Abdullah al-Nakhii as chief of staff.
A week of intense fighting for Hodeida has left hundreds of combatants dead as government forces advance into the rebel-held port city.
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Hadi last month fired his prime minister on accusations of corruption.
He named Moueen Abdulmalik Saeed, a former minister of public works with ties to Saudi Arabia and the UAE as the new head of government.
The World Health Organization estimates nearly 10,000 people have been killed since 2015, when Saudi Arabia and its allies intervened after Hadi fled into exile.
Human rights groups say the real death toll could be five times as high.
The battle for Hodeida, which provides a crucial lifeline for the 14 million Yemenis - half the country's population - now at risk of famine, has become the war's epicentre.
As much as 80 percent of humanitarian supplies, fuel and commercial goods that Yemenis depend on are delivered through the port city.
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