After modifying /etc/hosts which service needs to be restarted?

You don't need to restart any services.

When tested on a 14.04 server installation, the changes were reflected immediately.

The only service that I think could be related is 'networking', but it's unnecessary to restart it.

You can try:

sudo ifconfig eth0 down
sudo ifconfig eth0 up

(substitute eth0 with your network card)

but Arronical is right in theory: You don't need it.

Actually I noticed that postfix might benefit of a restart to include the new hosts in its local host file version that is available here /var/spool/postfix/etc/ (ubuntu 16.04)