Bit, in it, a hole (4)
I believe the answer is:
iota
'bit' is the definition.
(I have seen 'Tiny bit' mean 'iota' so perhaps 'bit' could also mean 'iota')
'in it a hole' is the wordplay.
'in' indicates putting letters inside.
'hole' becomes 'o'.
'it'+'a'='ita'
'ita' enclosing 'o' is 'IOTA'.
(Other definitions for iota that I've seen before include "Jot, particle" , "(Not one) little bit" , "The Greek i (4)" , "Ninth letter of Greek alphabet, small amount" , "Gk. letter; tiny amount" .)