It is well known that J.R.R. Tolkien in creating his mythopoeic books like The Lord of the Rings and The Hobbit extensively borrowed and adapted from the mythologies of Northern Europe, in particular the tales of the Poetic Edda, also known as the Elder Edda, a collection of poems written in the 1270s in Old Norse. It includes the legend of Sigurd and the fall of the Nibelung (Niflung or Niflungr in Old Norse), the tale that also served as Richard Wagner's principle source for his grand operatic cycle, The Ring of the Nibelung (Der Ring des Nibelungen in German), completed about 50 years before The Hobbit.
Some of the specific ideas from German and Norse myth that Tolkien used include a powerful magical ring, races of dwarves and elves, horses of supernatural speed, and men who transform into bears. Even some of the character and place names in Tolkien's works can be traced to the old myths. Here is a small sampling, some alongside images from the films The Hobbit and The Lord of the Rings.
Frodo, the protagonist of The Lord of the Rings, is the Latinized name of a character in Hrolf's Saga, which was written in Iceland in Old Norse prose in the 1300s, the original Old Norse being Fróði (Old English, Frōda, Latin Frotho, as in Saxo Grammaticus'sGesta Danorum--i.e., History of the Danes).
Bilbo, the protagonist of The Hobbit, is also an archaic English word meaning a well-tempered sword; bilbo was presumably derived from the Spanish town name, Bilbao. In The Hobbit, Bilbo's aquires a sword, Sting, which plays a crucial role in events, and in The Lord of the Rings, too. German and Norse myth has magical swords, too; one of the most well-known is Leg-Biter, a cursed blade, featured in Icelandic saga.
Beorn, the name of the man who can transform into a bear in The Hobbit, is the Old English word for bear, and such shape-changing occurs in old Norse myth. Its modern Anglicized equivalent, Bjorn, is common as a name even today in Scandinavian countries--as Björn in Swedish and Icelandic and as Bjørn in Norwegian and Danish.
Middle-earth is the English translation of both the Middle English word middel-erde and its Old English antecedent middangeard, (Miðgarðr in Old Norse) the world of men in German mythology, which featured nine worlds, though more literally it might be translated "middle-enclosure".*
orc, the singular noun in Tolkien's works meaning one of the race of orcs, a prevalent evil in Tolkien's Middle-earth about which Tolkien wrote in a letter, "the word is, as far as I am concerned, actually derived from Old English orc 'demon.'" Tolkien used the term goblin in The Hobbit to indicate an orc.
ent, the singular noun in Tolkien's works meaning one of the race of ents, which are large sentient trees, is the Old English word for giant, as in the Old English poetic line, orþanc enta geweorc ("work of cunning giants")
Orthanc, one of the two towers referred to in the title of Tolkien's work The Two Towers, from the Old English word orþanc, which I referenced in the poetic line cited above in the entry for ent. (In Old English, as well as Gothic, Old Norse, and Icelandic, the letter þ--known in Anglo-Saxon as the thorn--is pronounced as th in the modern English word that or in the word thief depending on its placement; the thorn is still used in modern Icelandic.) I like to pretend that it was the inspiration for The Shard.
troll, the singular noun in Tolkien's works meaning one of the race of trolls, is of course a word in use in English today, but its origin is as the Old Norse term meaning a fiendish giant or demon, but it carried supernatural connotations (in modern Swedish, trolla means to bewitch), while the trolls of Middle-earth are not magic users--in fact, they can be thunderously stupid.
Meduseld, the hall of the king of Rohan, Théoden, in The Lord of the Rings, is a combination of the Old English medu (mead) and seld (hall), "mead-hall" being a term in Old English lore; the most famous mead-hall in literature being Heorot, the mead-hall featured in Beowulf.
Eärendil, a character of Tolkien's Silmarillion, was inspired by the name and deeds of Éarendel of two of the Crist poems (that is, Christ poems)--Christ II and Elene--by the Anglo-Saxon poet Cynewulf ("kin-wulf")*
There are other clear, and some merely probable, sources in Norse and Germanic myth serving as inspiration for Tolkien during his creative work. The above is not an exhaustive list. But, if you go to see the recently-released film The Hobbit or enjoyed the film trilogy of The Lord of the Rings, I hope you'll appreciate not only that behind the films rest Tolkien's books, but behind the books are shades--or perhaps better described as the soft, even fading, light--of what one might call, curiously, "true myth," sagas and stories, sometimes of religious significance, told fireside among, and often about, Northern Europe's pre-modern people undertaking genuine quests for survival and a better life. We have more to thank them for than their tales, but I think it's good to treasure those, too.