Kirchhoff Voltage Law in a two port network
the total voltage in a loop is the algebraic sum of the individual voltages.


This is KVL, not KCL.


  It should be something like V1 = h11 I1 + V2 according to KCL. 


The voltage across the resistor is \$h_{11}I_1\$ and the voltage across the controlled voltage source is \$h_{12}V_2\$.

Therefore the KVL equation for this subcircuit is

$$V_1 = h_{11}I_1 + h_{12}V_2$$

as shown in the quoted text.


  What is this h12 V2 mean?


\$h_{12}V_2\$ is the voltage across the VCVS shown in the diagram. 

\$h_{12}\$ is the gain of the VCVS.

\$V_2\$ is the voltage across the other port of the 2-port. This is shown in the very next diagram in the linked tutorial.