The answer is yes, indirectly it will reduce insulin resistance and help a person reduce their hunger.
Drinking 8 glasses of water a day appears to bring down one's blood sugars by reducing insulin resistance due to proper hydration. While at the same time the more water you drink the less hungry a person is so they tend to eat less during the day, similar to drinking a glass of water prior to eating fills the stomach causing a person who is dieting to reach satiation (fullness) sooner.
If your blood sugars are very high and your kidney is not able to process all the sugar, water will help remove the excess sugar and ketones out of your system.
Drinking water is important for everyone but for diabetics, especially type 1 diabetics, it is crucial to remove excess ketones from the blood stream and reduce dehydration when blood sugars are high.