Hiddleston played the conniving Loki in the first Thor film and 2012's The Avengers, and he will reprise the role in Thor: The Dark World.
In an interview with Entertainment Weekly, the actor said that it is important for the Avengers franchise to move on to a new villain.
"[Loki's] not in it," Hiddleston said of The Avengers: Age of Ultron. "Here's the thing: I don't think there's anything else Loki could contribute to The Avengers, narratively.
"[Director] Joss [Whedon] gave me so many wonderful things to do in that first film that we'd only be trying to repeat ourselves, and probably less well in the second one."
He went on to say: "When I think of all the things I loved as a child, for example, Hans Gruber wasn't in Die Hard 2. And in Indiana Jones, by the time he moved from the Lost Ark to the Temple of Doom, there was a whole new bad guy. I think keeping it fresh and new is good for The Avengers, even though it's a shame for me.
"Let's face it, there's seven or eight of them as it is, and Joss is thinking about adding two more, so the screen's gonna be a busy place. But, I had the time of my life on that film. It was the most fun ever."
Hiddleston went on to assure fans of Loki that the character will have "plenty to do" in Thor: The Dark World.
The next Thor movie also features former Doctor Who star Christopher Eccleston as new villain Malekith the Accursed.
Hiddleston recently said that Eccleston "really got his teeth into" the role of Malekith, and teased that Loki and the new antagonist have a complicated dynamic.
Thor: The Dark World is released in the UK on October 30, and in the US on November 8.
Watch Tom Hiddleston discussing the film with Digital Spy below:
Photo gallery – 'Thor: The Dark World' set pictures: