"Position-wise we are more or less were we expected", Ricciardo said.
Second to Rosberg in the morning session, Hamilton surged ahead in the afternoon amid hot and sticky conditions with a track temperature of 42 degrees Celsius (108 F).
Hamilton also a chance to equal Juan Manuel Fangio three consecutive wins at Monza in 1953, '54 and '55.
Sebastian Vettel, in front of the partisan Italian crowd, will start from third on the grid, with his Ferrari team-mate Kimi Raikkonen alongside him on the second row.
Dutch teenager Max Verstappen, whose aggressive defending against Raikkonen at Spa last weekend is still the talk of the paddock, was eighth for Red Bull in the morning and fifth in the second session.
Rosberg slotted into second with his first run on medium tyres, before Hamilton moved to the top of the times with a 1:23.732 on a new set of soft tyres.
Featuring long straights and the highest speeds in F1 - up to 355 kph (220 mph) - there's plenty of space to overtake but aerodynamics make it a challenge.
Rosberg, victor in Belgium last weekend, set his best lap of the morning on the soft tyres as did Hamilton, who was one of several drivers to have off-track excursions as they probed the limits.
Britain's Lewis Hamilton steers his Mercedes during the second practice session for Sunday's Formula One Italian Grand Prix, at the Monza racetrack, Italy, Friday, Sept. 2, 2016.
Mercedes dominated once again in practice for the Italian Grand Prix, but Ferrari were their closest challengers.
"While we have reached an agreement (they) are getting all the small details that are important in a contract together and we will sign this back in England, " Ecclestone, 85, said.
He adds, "The contract is only for three years but I hope we will be here for another 100". The circuit hosted the Italian GP once in 1980 - the only occasion Monza hasn't hosted it since 1950 - before becoming known as the San Marino Grand Prix in 1981 until it was dropped in 2006.
Based on his previous record, Hamilton should be enthused by the extension.