"The principle of hydrophones was simple enough. It consisted of two pairs of underwater microphones which listened to the sound of ships’ propeller noises. By measuring the amount of time it took for sound to arrive at each of the microphones, the device could triangulate the bearing of the vessel from the U-boat. The radioman could also tell if it was a merchantman or warship, but not the range, direction or speed it was moving. Because sound travels much further underwater, hydrophones could pick up distant convoys traveling up to 100 kilometers away. For maximum effectiveness however, the U-boat had to submerge and stop all engines while the hydrophones listened in for a few minutes. It also had an added bonus of being passive(Source)."
"A (Greek "hydro" = "water" and "phone" = "sound") is a microphone designed to be used underwater for recording or listening to underwater sound. Most hydrophones are based on a piezoelectric transducer that generates electricity when subjected to a pressure change. Such piezoelectric materials, or transducers can convert a sound signal into an electrical signal since sound is a pressure wave. Some transducers can also serve as a projector (emitter), but not all have this capability, and may be destroyed if used in such a manner(Source)."
"A hydrophone can "listen" to sound in air, but will be less sensitive due to its design as having a good acoustic impedance match to water, the denser fluid. Likewise, a microphone can be buried in the ground, or immersed in water if it is put in a waterproof container, but will give similarly poor performance due to the similarly bad acoustic impedance match(Source)."