After being knocked down twice in the opening round, the 30-year-old Briton was flattened in the second by Pacquiao's left cross in Las Vegas on Saturday night for his second defeat in 47 fights.
After spending several minutes on his back in the ring, the two-time light-welterweight world champion had to be taken to a hospital for a precautionary brain scan, which the father said revealed no damage.
"He's perfectly all right," Ray Hatton told BBC Radio Five on Sunday. "They've checked him out. He's had all the tests and everything. He's not got a mark on him."
The loss might leave a lasting mark on Hatton's confidence, with his flimsy defense making him an easy target.
Ray Hatton said his son, whose other loss was a 10th-round knockout defeat to Floyd Mayweather Jr. in December 2007, would have to consider whether to carry on.
"Obviously, we will support him in whatever he does, and we'll leave that with him," his father said. "At this moment in time, he's probably got a few mixed feelings about it. He'll make that decision whichever way he wants to, and the family will support him."
Ray Hatton said his son doesn't need to continue boxing for the money, and that the fighter was convinced he had caught Pacquiao with some good punches.
"He just said, 'The old heart ruled the head again, Dad; steaming in, got my warning signs in the first round. Set off OK at the start of the second round, caught Manny with a few shots. Really worried Manny a little bit. Manny was just throwing wild shots.' He said, 'Then the heart ruled the head again and I went steaming in.'"
Hatton's trainer, Floyd Mayweather Sr., called on him to quit.
"I would suggest he retire. At the end of the day, it's his decision," Mayweather Sr. said. "He tried twice. He failed twice. He lost to my son and to lose to someone below that, it's time to leave the ring. He made a good profit. Sometimes you have to go when your prime is still there."
Carl Froch, who knocked out Jermain Taylor a week ago to retain his WBC super-middleweight title, also hopes Hatton retires.
"I have to say, if I was in his position after last night's performance, I would definitely retire," Froch said. "But I can't speak for another fighter. He will decide what he's going to do."