Terrain is created using displacements, which is a fancy name for a brush that has had its sides turned into meshes. To create one for terrain (I suggest making a test file for this first time, until you know what to do) go to the Toggle Texture Application tool on the left, select the top of the ground, go to displacement in the Toggle Texture Application window and select "Create". A window will pop ask asking for a level, 2 is low poly but is good for testing and early versions of maps, 3 is good for polished maps and level 4 is pretty broken, and will crash things. I wouldn't use level 4. Then, use the paint geometry to add terrain height like bumps and hills, like you would see in game.
To add grass/dirt to the terrain, search for 'blend' in the texture library, apply it to your displacement, and then use the "Paint Alpha" tool in the displacements tab to add grass/dirt. It will look really basic in Hammer, but if you used a blend texture with special gradients, when you compile it will look like proper grass/dirt.
That's long and confusing, but I hope it helped!
