Hasina recalled the IAF's intervention on the skylines of Dhaka when Air Chief Marshal Arup Raha called on her at her office here.
During the meeting with Raha, who is on a five-day visit to Bangladesh, she discussed various issues of mutual interests including in the areas of economy and defence.
"They discussed various issues relating to mutual interests and cooperation in various sectors including in the areas of economy, communication and air forces of the two countries," a Prime Minister's Office spokesman told PTI.
"She particularly recalled an air battle in Dhaka at the fag end of the war and told the IAF chief that she along with other members of her family witnessed the battle from their confinement," her press secretary Ihsanul Karim said.
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She also recalled the sacrifices of the Indian forces and her personal gratitude to India, where she took refuge for six years after the August 15, 1975 assassination of her father and Bangladesh's founder 'Bangabandhu' Sheikh Mujibur Rahman.
Hasina highlighted the steps taken for regional cooperation such as the Bangladesh, Bhutan, India and Nepal (BBIN) initiative and the Bangladesh-China-India-Myanmar (BCIM) economic corridor for regional development.
Hasina stressed on increasing "haats" across the Indo-Bangla border.
She pointed out the direct flight operations from Sylhet Osmani International Airport, saying London and Europe-bound north Indians can use the airport for transit.
Raha's visit is intended to take the existing defence ties to the next level. The areas of cooperation at present include exchange in military training courses and joint sporting activities.
Raha said bilateral relations have reached a new height, and offered to contribute artifacts to Liberation War Museum.
Earlier today, Raha called on Bangladesh Navy Chief Vice-Admiral Nizamuddin Ahmed at the Naval Headquarters here.
The IAF chief arrived here on February 21 and is scheduled to leave Dhaka on February 25.