Dig a trench the length of the wall with a flat-bladed shovel. Cut the soil away from the hillside. Dig down 2 inches below the desired level.
Tamp the soil down in the trench with the end of a wooden board. Use a carpenter’s level to check the levelness of the trench. Add soil to low areas and remove soil at the high levels.
Spread a 2-inch layer of gravel in the bottom of the trench. Rake the gravel to even it out. Recheck the levelness of the gravel layer. The gravel provides drainage so the area behind the wall does not become waterlogged.
Place the first stone block in the trench beginning on one side. Set the next block next to the first and tap the block sideways with a rubber mallet, so the blocks fit tightly next to each other. Finish the row fitting the blocks together. Walk on the bottom row to push the blocks into the gravel.
Offset the joints of the next layer like a brick wall. This increases the stability and strength of the wall. Set the blocks in place just like the first layer. Walk on each layer of blocks to make sure that each block is firmly placed in the row.
Add more rows to the retaining wall until it is as tall as the cut in the hillside. Slant the wall backwards towards the hill. Return the soil to the gap behind the wall. Compact the soil behind the wall using a wooden board to tamp the soil down.