Abstract reasoning refers to the ability to analyze information, discover rules at an intangible level, and solve problems in innovative ways. Raven's Progressive Matrices (RPM) test is typically used to examine the capability of abstract reasoning. In the test, the subject is asked to identify the correct choice from the answer set to fill the missing panel at the bottom right of RPM (e.g., a 3$\times$3 matrix), following the underlying rules inside the matrix. Recent studies, taking advantage of Convolutional Neural Networks (CNNs), have achieved encouraging progress to accomplish the RPM test problems. Unfortunately, simply relying on the relation extraction at the matrix level, they fail to recognize the complex attribute patterns inside or across rows/columns of RPM. To address this problem, in this paper we propose a Hierarchical Rule Induction Network (HriNet), by intimating human induction strategies. HriNet extracts multiple granularity rule embeddings at different levels and integrates them through a gated embedding fusion module. We further introduce a rule similarity metric based on the embeddings, so that HriNet can not only be trained using a tuplet loss but also infer the best answer according to the similarity score. To comprehensively evaluate HriNet, we first fix the defects contained in the very recent RAVEN dataset and generate a new one named Balanced-RAVEN. Then extensive experiments are conducted on the large-scale dataset PGM and our Balanced-RAVEN, the results of which show that HriNet outperforms the state-of-the-art models by a large margin.