Rosberg completed the fastest lap on the Hockenheimring in 1 minute, 16.540 seconds in the third part of the session for what was also the weekend's fastest time.
"Home race, to be on pole is fantastic," the German said. "I would have preferred if it was an open fight with Lewis. I was a little less happy as a result (of Hamilton's crash) because Lewis didn't have a shot at it in the end, but all in all, yeah, a fantastic day up to now."
Hamilton crashed in the first part of the session, leading to a seven-minute delay after the British driver spectacularly spun off the track and crashed into barriers at Turn 13. His right front brake disc failed.
Hamilton was checked out at the medical center and seemed relatively unscathed.
"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," the 2008 world champion said.
Rosberg said he wasn't worried about having the same issue with his brakes as both drivers' cars were fitted with different systems.
Valtteri Bottas and Felipe Massa completed a day to remember for Williams by finishing second and third, respectively.
"Well done to everyone but Mercedes is still ahead," Bottas said. "I really felt I got everything out of the car today."
Kevin Magnussen claimed a commendable fourth place for McLaren, and the Dane was followed by Red Bull's Daniel Ricciardo and Sebastian Vettel in fifth and sixth.
"Other people were able to get more and more out of the track whereas we seemed to stabilize around a certain lap time," Vettel said. "It's a long race, anything can happen."
Vettel's optimism isn't supported by recent history. Nobody has won from outside the top three starters at Hockenheim since the track was re-profiled in 2001.
Ferrari's Fernando Alonso, Toro Rosso's Daniil Kvyat, and Force India drivers Nico Hulkenberg and Sergio Perez completed the top 10 on an afternoon when track temperatures climbed to 56 degrees C (133 F).
McLaren's Jenson Button, Ferrari's Kimi Raikkonen, Toro Rosso's Jean-Eric Vergne, Sauber's Esteban Gutierrez and Romain Grosjean of Lotus were all eliminated with Hamilton in qualifying's second cut.
Gutierrez was carrying a three-place penalty into the session for causing a collision with Lotus' Pastor Maldonado at the British GP so his 14th was knocked back to 17th, meaning Hamilton will start on Sunday in 15th rather than 16th.
Rosberg, who was also fastest in the morning's final practice session, holds a four-point lead over his British teammate and is ideally placed to extend it after his fourth pole from the last five races.
"There are no points for today. Important is tomorrow. There's a long way to go, but it's a good start," Rosberg said after claiming his ninth pole overall.
Speaking in German, Rosberg expressed his relief that "we're still the fastest" despite the removal from all cars of the front and rear interconnected suspension systems which were deemed to be possibly illegal by the FIA.
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