Step 1: Read the context carefully.
The sentence is describing the location of the village with respect to two different entities — the ocean and the hills.
Step 2: Recall grammar rule for prepositions.
- “between” is used when exactly two distinct places or objects are mentioned.
- “among” is used when referring to more than two.
- “in” means located inside something (not correct here).
- “at” refers to a point location (not suitable here).
- “through” refers to motion from one side to another (not correct here).
Step 3: Apply the rule.
Here we have exactly two entities: the ocean and the hills. Hence, the correct preposition is “between.”
Final Answer:
\[
\boxed{\text{between}}
\]