The hose sounds like the 4WD vacuum switch line hose that connects to the vacuum switch on top of the transfer-case on the driver's side. When the vacuum switch is activated, it actives the 4WD actuator under the battery to lock up the front axle hub in the differential giving you 4WD mode.
Inspect the vacuum hoses and replace and damaged parts and reconnect the vacuum line to the vacuum switch. This should get your 4WD running 100% again.
Thank you for using Fixya and good luck, if the switch is faulty. You can pick one up at Auto Zone, Napa for around $25.00 and can be replaced in about 20 min with common tools.
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