Involved in the biosynthesis of 5-hydroxyectoine, called compatible solute, which helps organisms to survive extreme osmotic stress by acting as a highly soluble organic osmolyte. Catalyzes the 2-oxoglutarate-dependent selective hydroxylation of L-ectoine to yield (4S,5S)-5-hydroxyectoine. 2-oxoglutarate + L-ectoine + O2 = 5-hydroxyectoine + CO2 + succinate Binds 1 Fe(2+) ion. Optimum pH is 7.5. Optimum temperature is 32 degrees Celsius. Homodimer. Belongs to the PhyH family. EctD subfamily. Truncated N-terminus.