The recovery and reuse of cathode materials from spent lithium-ion batteries (LIBs) have gained significant attention in recent years. In this work, we successfully transformed Ni, Co, Mn, and Al in spent LIBs into novel catalysts (i.e., NixFeyCoMnAl) for hydrogen generation from hydrazine hydrate (N2H4·H2O), while recovering the Li as lithium phosphate to prepare new LIBs. The synthesized nickel-based catalysts were characterized by X-ray diffraction, electron microscopy techniques, and X-ray photoelectron spectroscopy, and the effects of Al, Co, and Mn in the cathode materials of spent LIBs on the hydrogen (H2) production performance of the obtained NixFeyCoMnAl catalyst were investigated. The metallic Al in the catalyst enhanced the H2 selectivity and the turnover frequency (TOF) in N2H4·H2O decomposition, whereas Co had a minimal effect on the H2 selectivity and TOF, and Mn increased the TOF without significantly affecting the H2 selectivity. Furthermore, the influences of temperature and the NaOH and N2H4·H2O concentrations on N2H4·H2O decomposition were investigated to evaluate the performance of the Ni1Fe3CoMnAl catalyst. When N2H4·H2O was completely decomposed, the optimal H2 selectivity and TOF reached 91.67% and 38.56 h−1, respectively. In addition, the catalyst exhibited excellent stability after ten cycles of catalytic N2H4·H2O decomposition. This study provides a novel method for the value-added utilization of high-nickel ternary LIBs.