Hobbs was charged shortly after he confessed to stabbing the girls to death.
Authorities say DNA has now linked the killings to another man. Prosecutors dropped the charges and let Hobbs out of jail earlier this week.
Hobbs says he was kept in isolation for at least half his time in jail.
"It's not about me. It's about my kid. It's about my baby, Laura," Hobbs said in an interview from his mother's home in Wichita Falls, Texas.
Hobbs, who was driven to Texas by three members of his defense team, said he was afraid to scream his innocence from jail.
"The only thing they had gotten out of me was what they got out of a broken father," said Hobbs. "I just lost my child."
Hobbs was quietly ushered out of the courthouse and into a waiting car.
The local prosecutor admitted Wednesday authorities got it wrong when they charged the father but he would not offer Hobbs an apology.
"For five years Jerry Hobbs sat wrongfully changed with a crime he did not commit and the only evidence was the statement extracted from him by the Major Crimes Task Force," said Keith Grant, Hobbs' defense attorney.
The signed and videotaped confession was the crux of prosecutors' case against Hobbs. Hobbs said he confessed only after two days of nearly nonstop interrogation.
"Coercion takes many forms and there was more than any single aspect of why he ultimately signed the statement," said Grant. "The first thing he said was not 'get me out of here,' but 'make sure we do justice for Laura."
The government's case began to unravel two years ago when the Lake County Public Defender's Office found DNA on Laura Hobbs. That DNA didn't match her dad, Jerry Hobbs.
Despite evidence indicating someone else had left DNA on the 8-year-old girl in the hours or days leading up to the murder, prosecutors remained focused on Hobbs. They say it's because there were no injuries to suggest she had been raped.
"The girls were fully clothed. There was no evidence that they had been sexually assaulted," said Michael Waller, Lake County State's Attorney. "I don't believe law enforcement did anything wrong in this case."
That statement has angered Hobbs' family.
"How do you hold a man five years, four years in solitary confinement and not apologize? And for him to say he did nothing wrong? An apology to him would have gone a long way," said Jerry Hobbs' mother.
The Lake County state's attorney said Wednesdsay he now no longer believes Jerry Hobbs played a role in his daughter's death. According to Krystal Tobias' relatives, the DNA evidence links the crime to Jorge Torrez. He's a former Marine now charged in Virginia with a series of rapes. Torrez was close friends with Krystal Tobias' older brother, Alberto.
"I was 15 years old at the time. I didn't really see anything suspicious. If he tried to make a move on them," said Alberto Segura, victim's brother.
Krystal's relatives say they no longer know what or whom to believe.
"Right now I'm just feeling like it's already been five years. I really don't care who did it or did not. God will handle it," said Segura.
"Honestly, I have no more faith in the criminal justice system. I really don't," said Sam Alterson, victim's cousin. "It makes me sick to my stomach. I know my family is hurting."
The author of a book on false confessions says he believes in Hobbs' innocence.
"When I met Jerry Hobbs I could tell he was in pain over the loss of this child. I knew in a minute that he wouldn't have killed this child," said Rob Warden, NU Center on Wrongful Convictions.
Prosecutors wouldn't say when they planned to move forward on possible charges against the former Tobias family friend who is now the prime suspect in the case. They're in no hurry because he's already in prison for rape.
Jerry Hobbs is said to be considering filing a lawsuit against Lake County and the Village of Zion for the conduct of investigators in this case. Hobbs' attorney, though, says his client is less concerned about his own circumstance over the last five years than ensuring the real killer is charged and convicted.
The Associated Press contributed to this report.