A novel fiber optic localized surface plasmon resonance (LSPR) hydrogen sensor has been developed based on the hetero-core structured with palladium nanoparticles (PdNPs) onto a cylindrical cladding surface. In a light-intensity-based experiment with an LED operating at 850 nm, it has been observed that a transmitted loss change of 0.23 dB was induced with response and recovery times of 1.5 and 3.2 s for 4% hydrogen which are the fastest response times among optical fiber hydrogen sensors. The proposed sensor resolved the inevitable trade-off issue between sensitivity and response time which existed in the previously reported SPR sensors, with keeping the response time below 2.0 s even in a high sensitivity region of interest.