Jeffery Pachter worked with Peterson at a Downers Grove cable company and says his former co-worker asked him to find someone to murder Savio.
He said Peterson asked him if he "knew anybody who could have his third wife taken care of."
Pachter says Peterson offered him $25,000 that he could split with the assailant.
"He told me he wanted to know when it was going to be done so he could have an alibi," Pachter said.
Peterson's defense team calls Pachter, a registered sex offender with significant debts, an unreliable witness.
She testified about a conversation she had with Stacy two weeks before she disappeared.
"She looked at me with a blank face and told me she feared for her life," Cales said.
The testimony comes at the halfway point in Peterson's hearsay hearing. Judge Stephen White must decide how much of this testimony will be allowed at Peterson's upcoming trial on charges he killed Savio.
The hearing has so far included testimony from co-workers of Savio's who described her fears that Peterson might harm her and an investigator who claims Peterson talked about his missing wife in the past tense. Peterson's stepbrother testified that he believes he unknowingly helped Peterson dispose of a body.
The lead investigator in Savio's death testified last week that he never considered her death anything but an accident but conceded that errors were made during the investigation.
A minister who was scheduled to testify Wednesday will instead testify Friday.
The hearing stems from a state law that allows a judge to admit hearsay evidence in first-degree murder cases if prosecutors can prove a defendant killed a witness to prevent him or her from testifying.