This just happened today while i was driving. I usually drive cruise control when im going a long distance but as i stated It will turn on but wont set.
long stick wedged from your console to the gas pedal. Assuming no codes perhaps your driving with your foot rested on the brake? Otherwise, I would begin investigating the brake switch that tells the cruise control your braking. Since I have not fiddled with that part of the car perhaps someone can clear up those details on how the prius knows your braking for cruise control. I'd be curious to know if your brakes flash intermittently while driving. Hope these ideas help.
One could plug in a scan tool and watch the cruise control data list, to see things like: is the brake pedal input being seen when it shouldn't be? is the SET switch input not being seen when it should be? Stuff like that.
I had this issue with mine and it turned out to be my clock spring in the steering wheel. They break from all the turning of the steering wheel. Mine was at 720,000 kms when it happened. Got a replacement, installed it and cruise works again.
Good outcome. For others, observing the data list items suggested in #3 can help with deciding whether the same thing is likely to be the cause of their issue.