Hamilton's 260-kilometre-per-hour smash left the Briton shaken but fit to line-up on Sunday when he will have to start from 15th on the grid.
Mercedes confirmed that the accident was caused by a brake failure that wrecked Hamilton's car and his session and reduced his chances of trimming Rosberg's four-point lead in their duel for the championship title.
His success in qualifying gave Rosberg a 5:4 advantage in poles over Hamilton this season.
It also came in a memorable week when the 29-year-old German married his long-term girlfriend Vivian Sibold, signed a new contract with Mercedes and cheered Germany to World Cup victory.
"For now, it's been going really well," said Rosberg.
"Home race, to be on pole is fantastic. I would have preferred if it was an open fight with Lewis so I'm less happy as a result, but it's still a fantastic day.
"But there are no points for qualifying and there is still a long way to go. Tomorrow, it is supposed to be a bit colder, so it should make it easier on the tyres. The weather could play a role, so I just need to take it as it comes."
Hamilton spun into the barriers heavily at the Sachskurve when the right front brake disc of his Mercedes car failed as he attempted to slow from an estimated 260 km/h.
He was winded, bruised and shaken by the impact but climbed from his car and was later able to walk away from the medical centre where his knees were examined carefully.
"I'm a little bit sore, but I'll be OK," said Hamilton.
"I've got a little bit of pain but that's what usually happens when you have a crash like that. Even if something's broken, I'll still be driving tomorrow."
Hamilton officially qualified a provisional 16th, but a penalty for Esteban Gutierrez of Sauber lifts him up a place on the grid.
Rosberg did not allow doubt into his mind as he delivered fastest laps in all three sessions, culminating in a blistering one minute and 16.540 seconds to seize his fourth pole in five races.
It gives him a huge advantage for Sunday's 67-lap race as only three times since 1987 has the winner at Hockenheim qualified from behind the front row.
Valtteri Bottas secured the second front row start of his career and second in three races for Williams ahead of team-mate Felipe Massa and Kevin Magnussen, fourth for McLaren.
Australian Daniel Ricciardo again out-qualified his Red Bull team-mate Sebastian Vettel by taking fifth place ahead of the defending champion with Fernando Alonso seventh for Ferrari.
Daniil Kkyvat was eighth for Toro Rosso ahead of Nico Hulkenberg and his Force India team-mate Sergio Perez.
Hamilton and Mercedes will have to overcome one dilemma before Sunday's race — not only do they need to repair the 2008 champion's car, but they have to resolve what braking system to use.
Hamilton and Rosberg employ different brake manufacturers and it is therefore possible that, following Saturday's failure, the team will consider suggesting to Hamilton that he switches to use the same brakes as Rosberg as a security precaution.
But that will be a setback for Hamilton who, like most elite racing drivers, has picked his brake company based on the feel he has from their performance on track.
If he has to switch, it will mean having to learn how to adjust to a very different system.