The onClick attribute of html tags only takes Javascript but not PHP code. However, you can easily call a PHP function from within the Javascript code by using the JS document.write() function - effectively calling the PHP function by "writing" its call to the browser window: Eg.
onclick="document.write('<?php //call a PHP function here ?>');"
Your example:
<?php
function hello(){
echo "Hello";
}
?>
<input type="button" name="Release" onclick="document.write('<?php hello() ?>');" value="Click to Release">