The Premier League title holders looked to be falling eight points behind after David Meyler's first-half goal before the England midfielder bailed them out at the death
Still without Yaya Toure, Manuel Pellegrini's men were unimpressive throughout and conceded not long before half-time when David Meyler capitalised on the rebound from a Gaston Ramirez effort that hit the post.
The hosts dominated play in the second half as they searched for an equaliser and finally levelled matters at the death when Milner came off the bench to find the net.
|VIEW FROM THE ETIHAD
|By Tom Maston
James Milner's free kick may mean that Manchester City are only seven points behind Chelsea rather than eight but it cannot detract from what was a miserable performance from the Premier League champions. They were lethergic throughout, with Yaya Toure's absence again showing, and they barely created a chance of note until the closing stages.
Hull City deserved at least a point for their workmanlike showing and, if they can replicate this in the coming weeks, then Steve Bruce may well yet keep them afloat. For now, they remain without a win in five matches.
Though denied a fifth win of the Premier League season, Hull clambered out of the bottom three on goal difference above Burnley.
Striker Edin Dzeko was one of three changes from Pellegrini and he threatened down the left early on before Sone Aluko - brought in by Bruce as Hull's lone forward - tested Joe Hart soon afterwards.
Despite their dismal run of form, Bruce's men acquitted themselves well and had the game's first clear-cut chance when Ahmed Elmohamady crashed a header against Hart's crossbar 15 minutes in from a deep Robbie Brady cross.
While the champions gathered themselves after that scare, Pellegrini's side continued to falter going forward and were eventually punished for their sluggish start when Meyler rewarded Hull's persistence.
Brady's effort was saved by Hart following a poor Martin Demichelis clearance before Ramirez hit the post as Fernandinho failed to deal with the danger. However, when the rebound fell to Meyler, the midfielder made no mistake to open the scoring amid sloppy defending from Pellegrini's back line.
Pellegrini responded at the break by taking Fernando off for Jesus Navas and his side responded well as Dzeko connected acrobatically with Pablo Zabaleta's cross to threaten Allan McGregor's goal.
David Silva then saw penalty appeals waved away by Jon Moss as he went down under clumsy contact from Alex Bruce as the home side continued to knock at the door.
The otherwise quiet Sergio Aguero almost gained his side a point late on as he controlled the ball with his right foot before unleashing a stunning strike against the crossbar with his left in the final minute of normal time.
Pellegrini's men were eventually rewarded for their second-half onslaught thanks to Milner's perfectly dispatched free kick, although the Chilean has plenty to ponder in his quest to reel Chelsea in at the summit.