I'd like to report what must be a bug. I have done a lot of testing and have found out that Hydra does not benefit at all from either Life Steal or Life on Hit (whatever the amount).
I understand that LoH is evened out depending on whether the skill is multitarget or single target, but even by those standards it should provide life at a certain rate.
On the other hand, Life Steal is more of a fixed stat, and according to its description (and one's common sense) all the damage you do should steal life for you at a fixed rate (the percentage you have on your gear, skills or passives).
I believe this is a sort of game-breaking bug, considered Hydra is a skill that causes a lot of damage and can make it very difficult (without the right skills and proper care) to fight reflect damage affix elites and champions.
If you take a look at the following thread, you can see that for a brief time, Hydra not benefitting from LoH or LS made it into the Known Issues thread, but its entry has been deleted as of now. This was posted and quoted by none other than a Blue.
Let's try and remind Blizzard that this is still a known issue, and that it shouldn't be deleted from that list!