Hogan has said that he is "devastated" about the leak of the secretly-filmed tape, which features Heather Clem, the estranged wife of his friend Bubba the Love Sponge.
It has now emerged that Bubba knew about the tape as he appears at the end of the video once Hogan has left, TMZ reports.
In the last few minutes, he reportedly says: "If we ever did want to retire, all we'd have to do is use this footage of him."
Told about the comments on TMZ Live, Hogan said: "If that is true, I'm sick to my stomach right now, because I have gone over this with Bubba. I don't know why someone would secretly film this, and when this first popped up six or seven months ago, it was something I was praying would go away."
Explaining that he made a "bad choice" when he was at an "all time low", Hogan added that Bubba and Clem have always been "close friends".
"Bubba has been nothing but a good friend to me," he said. "Heather's always been such a nice person to me and was always kind.... I thought it was a joke when Heather was making advances and Bubba was saying, 'It's okay, it's okay' - this went on constantly for a couple of years before the incident.
"Then when it happened, it was my choice. When the offer was made again I made a huge mistake and I will forever be sorry for that."
Hogan also revealed that he has questioned Bubba about the tape, saying: "I've asked him. I said, 'Bubba, you are my friend'. I said this to him a few days ago, and I still stand by this - 'Bubba, you are my friend, and you're one of the only real friends I have in my life.
"'I value your friendship and whoever did this to me, filmed me secretly, whoever leaked this tape, I don't know what the motive is, if it's just trying to destroy me or if they're trying to make money, but if you had anything to do this that meant we were never friends - I love you to death and I know you have a family - and that if you did this you need to tell me now'. That conversation has happened several times."
Hogan added: "You telling me something like this makes me sick right now."
Hogan, who has threatened to sue over the video, added: "I want to have a full blown criminal and civil investigation on who set this camera up and who released the tape... We will not be happy until we've exhausted all our sources and they're being led out of jail in handcuffs, because this is a criminal offence."
Hogan has reportedly warned his family that other sex tapes could emerge in the future.
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