Three-time world champion Zoeggeler, who won bronze at Lillehammer in 1994 and silver in Nagano four years later, finished more than 0.30 seconds ahead of Hackl after four runs.
Hackl trailed by 0.232 seconds after three attempts but almost penned his place in the history books with a remarkable final run of his own.
He surged 0.013 seconds ahead of Zoeggeler to leave him requiring a near fautless performance.
But the Italian did not disappoint as he held his nerve to streak home for a first Olympic gold.
And Hackl, who still set a first by winning a fifth consecutive Winter Games medal, admitted he had lost to the better man.
"I've always said it. Armin sets the standard and he set it here too," he said.
"He has been the best luger in the last four years and he deserved it. It would have been a shame if he'd not won. For me the silver has the same value as the gold."
Zoeggeler, who collected his country's second gold of the Games, beamed: "It was a long wait and a long way to establish this gold medal.
"It took a lot of power and energy but now I am really happy."
Meanwhile, there was disappointment for home favourite Adam Heidt who was edged out of the medal positions.
Heidt was seeking a first US medal in the event but missed out to Austria's Markus Prock who took the bronze.
Britain's Mark Hatton came home a respectable 25th out of 48 finishers.