Where there was parental demand and a need for places, he said, “I want it to be possible to create those new schools”.
Sheila Gewolb, Board of Deputies vice-president, welcomed Mr Hinds’s move.
“Faith schools should be celebrated, not stigmatised,” she tweeted.
Mr Hinds, a practising Catholic who has previously spoken in favour of removing the cap, was appointed Education Secretary last month.
The plan to remove the quota was first announced by Prime Minister Theresa May in late 2016.
While currently a faith free school can only reserve half their places on the basis of religion, children of the same faith may still win a place on other grounds such as living close to the school.