From the play's beginning, Hotspur is a foil to Prince Hal. This is especially true in scenes where King Henry compares his son (unfavorably) to the noble young Percy. While Percy is praised for being the "theme of honour's tongue," Prince Hal is said to wear the "stain" of "dishonour" on his "brow," and Shakespeare goes out of his way to establish this sense of rivalry in the play. Literary critic Jean E. Howard notes that the real Hotspur was a lot older than the prince, but Shakespeare makes the two roughly the same age in order to play up the dramatic contrast between the characters. (During the Battle of Shrewsbury in 1403, Prince Hal was sixteen and Hotspur was thirty-nine. As Howard notes, Shakespeare likely borrowed this idea from Samuel Daniel's poem The Civil Wars, c.1595.)
Falstaff's raucous, degenerate, and cowardly behavior pretty clearly acts as a foil to that of Hotspur, whose upright actions (except for that whole rebelling against the king thing) and courage on the battlefield offer the perfect model for chivalry and honor.
Some critics even see Falstaff as being much like a "Vice" figure playing opposite to Hotspur's "Virtue." ("Vice" and "Virtue" are stock characters in the old school morality plays that Shakespeare was so familiar with.) We like the way literary critic Katherine Sirluck sums things up in her article on Prince Hal (for The Falstaff Project): "Central to the structuring of the Henry plays is the Pyschomachia (battle of the soul) of the English Morality plays, where personified Virtues and Vices struggle for control of a human being. Hal is the Everyman character, torn between Virtue (Hotspur's Chivalry […]) on the one hand and Vice (Falstaff as Idleness and Riot) on the other. But Shakespeare's use of this model is ironic, for in choosing Virtue (Hotspur) Hal must kill a noble opponent, thus debasing the very Honour he obtains; and in rejecting Vice (Falstaff), Hal commits a greater indecency, perhaps, than the tavern misdeeds he must leave behind" (10).
No, that's not a typo. Prince Hal really does act as a foil to his own character in the play by establishing a reputation as a wild child with a penchant for hanging out with criminals and commoners. The plan, according to Hal, is to establish low expectations in the minds of his future subjects and his father. When Hal later defeats Hotspur in battle and saves his father's life, he redeems his reputation, shocks the kingdom, and establishes himself as one fit to be a ruler.