Althusser insists that ideology is pervasive and that ideology "interpellates" subjects; that is, ideology brings subjects into being. In other words, ideology changes individuals into subjects; into those who are now "subject" to or subjected to ideology.
I shall then suggest that ideology ‘acts’ or ‘functions’ in such a way that it ‘recruits’ subjects among the individuals (it recruits them all), or ‘transforms’ the individuals into subjects (it transforms them all) by that very precise operation which I have called interpellation or hailing, and which can be imagined along the lines of the most commonplace everyday police (or other) hailing: ‘Hey, you there!’
Althusser describes the function of individuals becoming subjects with the simple analogy of being recognized. Once an individual is recognized or "hailed" by another, that individual becomes a subject, subjected to the ideological belief systems of the one who hailed him. Althusser also uses the analogy of being born into "subjecthood." A baby is born into a familial structure, a cultural structure, and so on; the baby is already becoming subjected to these ideological structures even before he/she is born. In other words, ideology is inescapable. Only when one is truly outside of an ideology (say, a former Nazi who was once totally dedicated to the Nazi party but then had an epiphany and now reviles the party's ideology) - only when one is really out of ideology can one know that they were in it to begin with. In other words, the ideological character of ideology is that it reconditions its own conditions for subsistence. Therefore, for it to work on subjects, those subjects won't really know how they are ideologically programmed.
Two things are occurring with respect to these ideas on ideology and Iago's speech in Act II, Scene 3. First, Iago rationalizes that he is not the villain because he is simply telling others what they want to hear. He is trying to convince himself that he is beyond his own ideology. Second, he is giving what he believes to be honest advice; but this so called honest advice is also manipulative. This is the function of ideology; to appear to the subjects to be honest or "natural" and true, but in reality ideology is a dogma, a manipulation of subjects. Here, it is useful to think of ideology in general as a subjective structure belief systems but in terms of knowledge, ideology is more like opinion than fact. Iago's manipulation of Othello and others functions like ideology. They think he is giving them honest, true advice; but he is actually giving them advice on how to behave to suit his ideological agenda, thus "hailing" them or interpellating them into becoming loyal subjects of his. They are hailed into behaving in ways that suit his agenda, that suits his ideological framework.