The hydrophobic interaction between objects immersed in water is typically attractive and adds to the well-known van der Waals interaction. The former supposedly dominates the latter on nanometric distances and could be of major importance in the assembly of biologic objects. Here, we show that the fluctuation-induced attraction between two objects immersed in a correlated dielectric medium which models water is the sum of a van der Waals term and a short-range contribution that can be identified as part of the hydrophobic interaction. In this framework, we calculate analytically the fluid correlation function and the fluctuation-induced interaction between small and extended inclusions embedded in water and we characterize the hydrophobic terms.