Chriselliam, a bookies' favourite for the Qipco 1000 Guineas at Newmarket, has been put down after failing to recover from a foot infection.
In January it was revealed the three-year-old was suffering with a poisoned foot but she had been expected to make a full recovery.
"It's a shocker," said Hills.
He added: "She split her shoe and we thought we had it under control but she took a bad turn and it got re-infected. The antibiotics weren't working and it spread to her pedal bone."
Chriselliam was joint-owned by former champion jockey Willie Carson and music mogul Chris Wright, who tweeted: "RIP Chriselliam. A true champion on both sides of the Atlantic. Only the good die young."