Number eight Ward-Smith, who has trained with England during their autumn Test campaign, was comfortably Bristol's best player as they stunned west country rivals Gloucester 14-12 through a dramatic drop-goal by substitute Jason Strange.
Strange's strike - in the 10th minute of injury time - took Bristol three points clear at the Premiership summit and ended Gloucester's unbeaten league record this season.
Ward-Smith though, is knocking on the door for England recognition in this season's RBS 6 Nations Championship.
"Dan has got star quality, and from talking to (England head coach) Andy Robinson, I know he is being looked at very carefully," said Hill.
"He is developing very well, and I believe his time could come."
Hill also had words of praise for Strange, who took over from injured fly-half David Hill to hit the jackpot after Gloucester fly-half Willie Walker's fourth successful penalty had edged the visitors ahead with time running out.
New Zealand import Hill is likely to dominate the fly-half picture for Bristol as their season unfolds, but Strange came up trumps when it really mattered.
Hill added: "Jason has taken a big disappointment with David Hill coming in, given that he (Strange) has been our top dog in the fly-half position for two years now.
"I am delighted for him. It was a superb achievement to land that kick under such pressure, and it showed great character."
Meanwhile, reigning champions Sale returned to winning ways with a hard-fought 17-12 victory against Harlequins at Edgeley Park.
The victory provided welcome relief for director of rugby Phillipe Saint-Andre after successive defeats against Bristol and Newcastle and the triple injury blow which has left Charlie Hodgson, Jason White and Andrew Sheridan sidelined for the rest of the season.
Frenchman Daniel Larrechea helped ease the Sharks into a 14-3 interval lead with a drop-goal and two penalties while Magnus Lund crossed the line to end the reigning champions' three-match try drought.
Quins hit back in the second half when Adrian Jarvis added to his first-half penalty with three further goals to reduce the deficit to two points, but Larrechea's third penalty of the game saw Sale home and dry.
Saint-Andre said: "It was a very important win and you could see that the confidence was not very high.
"We didn't finish them but we showed a lot of character and we managed to win - and I think we deserved to win."
Quins had won their previous three matches but director of rugby Dean Richards, whose side claimed a bonus point, admitted: "It was a very poor first-half performance and everybody is disappointed with that.
"However, I don't think we got the rub of the green from the referee.
"We thought he gave too many decisions on one side and not on the other."