The investigation followed reports in the Sunday Mirror in which several witnesses claimed to have seen Mr Hall taking drugs.
Northumbria police said that a senior officer had contacted the newspaper in connection with the allegations and journalists had been asked to hand over statements.
A force spokeswoman said: "The inquiry is in its early stages. A lot will depend on what information is gathered and what that points to."
Prior to publication of the article nine days ago, Mr Hall's solicitor had issued a denial that his client had ever been involved in drug-taking.
The police action follows calls by Jim Cousins, the Labour MP for Newcastle Central, for an investigation into the claims, which referred to locations in his constituency. Yesterday he said: "If the allegations that were made in the newspaper are correct then they refer to what would be serious criminal offences.
"There must be an investigation to get to the bottom of it for the sake of everybody concerned, including Douglas Hall."
News of the Northumbria police inquiry follows the revelation in The Independent yesterday that South Yorkshire police are investigating a pounds 200m proposed property development involving a company controlled by Mr Hall.
Detectives involved in a wider inquiry into allegations of financial mismanagement at Doncaster council have spoken to council officers, and former and serving councillors in Doncaster in connection with an ambitious plan to build a championship golf course on prime agricultural and green belt land at Rossington Hall. The 2,300-acre project also includes a leisure hotel and business complex and 1,100 homes.
Mr Hall and Newcastle United's chairman, Freddy Shepherd, resigned from the club a week ago after allegedly making derogatory remarks about fans and describing Newcastle women as "dogs" to an undercover reporter from the News of the World.
After their comments, allegedly made in a Spanish brothel, were made public, 96 per cent of Newcastle supporters called on them to go. Following the resignations, Mr Hall's father, the millionaire Sir John Hall, took over the club chairmanship.Reuse content