The hippocampus is part of the limbic system. It is roughly the shape of a seahorse and, as with the amygdalae, there is one in each temporal lobe in the middle bottom of the brain and they are about the size of your thumbs.
Stress affects the amygdala,the hippocampus and the prefrontal cortex, often with lasting changes. Given the complexity of the brain, there are no easy answers and it’s entirely possible that both things may be true. These areas play a major role in anger and fear, memory, and motivations and play a major role in the “fight, freeze, or flight” response. The hippocampus is believed to be responsible for the processing of long-term memory and emotional responses. Some with CPTSD will have trouble retrieving memories and others will retain vivid memories of trauma and abuse. The elements of the limbic system can shrink in the presence of persistent ongoing childhood trauma. There is ongoing research as to whether a smaller hippocampus puts one at greater risk of PTSD rather than trauma impacting the structure. It makes sense though that for young children,the trauma alters the brain chemistry and the structures of in the developing brain.
Fortunately for victims of childhood trauma, the hippocampus demonstrates an unusual capacity for neuronal plasticity and regeneration. Exercise can regenerate neurons in the hippocampus. Growing up in La Jolla with an active lifestyle, bodysurfing, walking up Nautilus Street every day probably healed some of what the house I grew up did to me at least as far as my hippocampi were concerned.