Most kids hit or bite at some point. However, those who keep it up usually feel they're getting something out of it -- earning attention (even the negative kind), making their sibling unhappy, or just having a chance to express anger. To help this phase pass more quickly, immediately go to the child who was hurt, scoop her up for a hug, and say "No biting" to your toddler. Then put him in time-out, set a timer for a few minutes, and don't pay him any attention. For most kids, it's better not to have a designated "time-out" spot because if they leave, they're getting away with something or you pay attention to them trying to get them to stay. The timer is important so that the end of the session is not subjective. After the timer rings, treat your child normally, but be sure to first repeat the message that there's no biting in your family.
Trust that this behavior should subside as your child becomes more verbal and better able to express his emotions without resorting to hitting or hair-tugging.