Red Bull's Sebastian Vettel was second and title rival Fernando Alonso sixth.
Vettel was just 0.037 seconds slower than Hamilton, with the Ferrari driver 0.744secs off the pace.
The Spaniard is 60 points behind Vettel heading into the race with 150 points available in the remaining six races.
Red Bull's Mark Webber was third fastest ahead of the second Mercedes of Nico Rosberg, with McLaren's Jenson Button fifth.
Raikkonen - who was eighth fastest, just behind team-mate Romain Grosjean - lost control in the penultimate corner, a right-hander, and the car spun through the left-hand kink that followed and into the tyre wall.
Lotus trackside operations director Alan Permane said there had not been a car failure and that the team would have no problems repairing it for the second session, which starts at 0600 BST. Raikkonen's back was causing him no problems, he added.
Korea advisor: Gary Anderson's guide
The Korean Grand Prix is no-one in Formula 1's favourite race, but the track provides a good, all-round challenge for the cars and drivers.
Lotus have both cars set up in long-wheelbase trim, a specification last tried - but not raced - at
the Italian Grand Prix
a month ago.
After a slow start it was a relatively eventful session. Several drivers spun or ran wide at the tricky Turn 10 right-hander, among them Hamilton and Force India's English reserve driver James Calado, who ended the session 18th fastest as he stood in for Scot Paul Di Resta.
Marussia reserve driver Rodolfo Gonzalez, standing in for Jules Bianchi in the first session, crashed early on and broke his car's nose cone.
The team managed to repair the car and the Venezuelan was able to get out again with 20 minutes of the session remaining. He ended it 2.71secs slower than team-mate Max Chilton.
Friday 4 October: Second practice at 05:55 BST on BBC Radio 5 live sports extra, plus live text commentary online from 05:30.
Korean Grand Prix, day two
Saturday 5 October: Final practice at 02:55 BST on BBC Radio 5 live sports extra, online live text commentary from 02:30 BST. Qualifying at 05:55 BST on BBC Radio 5 live sports extra plus live text commentary online from 05:00. Qualifying highlights, 13:15 BST on BBC One.
Korean Grand Prix, day three
Sunday 6 October: Race coverage at 06:55 BST on BBC Radio 5 live, and live text commentary online from 06:00. Race highlights, 14:00 BST on BBC One.
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