A two-minute period of silence at 9.50am was impeccably observed, with DP World Tour chief executive Keith Pelley joining staff, players and caddies on the putting green in front of the first tee at Wentworth.
The proclamation of King Charles III was also shown on the television screens in the Championship Village.
Hovland, who added a 68 to his opening 64 to join Kjeldsen on 12 under par, felt the right decision had been taken to continue with the tournament and reduce it to 54 holes.
"I think so," the world number 10 said. "Obviously it's a sad thing that happened but maybe spin around and use the sport as a celebration and remember the Queen's life and celebrate it in that way.
"It was eerily quiet on the course during the silence, but I think it's a good thing that we all pay our respects. It's good for the players that we get to play, it's good for the DP World Tour and I think most people in general."
Hovland won his second DP World Tour title in Dubai in January and would love to claim another of the circuit's biggest events, especially with Ryder Cup qualifying starting this week.
"I played here in 2019 shortly after I turned pro and I was kind of a little wowed about the experience," he said.
"I'd watched a lot of European Tour events, but it was a little bit different showing up here the first time with so many people and just seeing the golf course for the first time after seeing it a little bit on TV.
"It was a cool experience that first time and I didn't play as well as I would have liked last year, but I've got a chance to win tomorrow. That would be awesome."
Kjeldsen had set the early target thanks to a superb 64, the 47-year-old Dane dropping a shot on the first but responding with an eagle and seven birdies.
Speaking about observing the period of silence on the 11th, Kjeldsen said: "Being a foreigner but having lived here I had some idea how much the Queen meant to the British public, but it was quite overwhelming and I was taken aback by how much she was loved. It was a very special moment."
Australia's Min Woo Lee revealed after his stunning 62 that he had travelled to Buckingham Palace on Friday to pay his respects to the Queen.
Play in Thursday's first round had been suspended when the Queen's death was announced, with no play taking place on Friday and the course and practice facilities closed.
"It was just a shock," Lee said after a round containing two eagles, seven birdies and one bogey which was a 14-shot improvement on round one.
"I finished (on Thursday) and I got the news and it's not really what you want to hear. We went down to Buckingham Palace with a few of the boys yesterday and paid our respects.
"Now we are back and playing golf and hopefully we can just keep smiles on our faces and play good golf."
The official mourning guidance, published by the Government on Friday morning, stated there was no obligation on sports organisations to cancel or reschedule events.
The UK's football authorities opted to postpone all domestic fixtures planned for this weekend, but other sports chose to go ahead, including cricket's third Test between England and South Africa at The Oval.
Pelley told Sky Sports: "Yesterday we had a number of conversations with DCMS and saw the guidance that came from the Palace.
"Most of the conversations that I had were with the England and Wales Cricket Board and we both felt that bringing people together at this particular time, having both had the honour and respect of the day of cancellation on Friday, was the right decision and the right thing to do.
"I have heard from so many players that want to honour Her Majesty and felt that playing was the right way to do it."