Toothless is the most intelligent of all the dragons and seems to have a dry sense of humor, similar to Hiccup’s. When Hiccup released him, he did not kill Hiccup.
From here it was a little bit evident that he sensed goodness in Hiccup. He just had a few doubts due to which he did not let Hiccup near him for a few days. He doesn’t take kindly to being offended, nor anyone offending or endangering his human friend but is usually playful and even a little teasing when not threatened. He shows a sense of great curiosity, imitating Hiccup’s actions and mannerisms when they initially encounter one another and can understand Hiccup’s words and commands as well as agree with some of what he says.