Steve Sheldon, of Cotswold Archaeology, said it was previously thought the area did not succumb to Saxon control during that period.
He said the settlement was one of the best finds of his career.
It is thought the hall, measuring 11m by 6m (36ft by 20ft), was used for communal events such as feasts.
Mr Sheldon, who is directing the excavation, said he “didn’t expect to find much” when the team started work.
Cliff Bateman, project manager at Cotswold Archaeology, said: “It would now appear that there were more pockets of Anglo-Saxon control in the Severn Valley than we previously thought.
“Anglo-Saxon burials have been found in Bishops Cleeve and Tewkesbury, but this discovery shows Saxon influence right on the very doorstep of Gloucester.”