Normal cow milk is about 87% water, but ocean water is 99.1% water with salt in it, and it doesn't quench your thirst at all. While both might hydrate you, the remaining components would cause other issues. The fat, protein, and lactose content of milk generally means it should satisfy / suppress appetite before quenching any kind of thirst cravings or hydration issues. However, research seems to indicate that milk might be a better hydrating agent than water, though how this is possible boggles my chemist mind and I would be suspicious of any research that tries to reach that conclusion.
Now, here's the thing: soups in the game generally satisfy some hydration and some hunger requirements per bowl (despite being made with dirty water), and while this is generally true in reality, soups are also usually seasoned with spices and salts, which wouldn't help your hydration levels at all as much as the game lets on. BUT, I bring this up because there is a code in place to make food items both hydrating and nourishing, and I think that would be more appropriate for milk than simple hydration or nutrition alone.