It is not entirely clear what operations are allowed. Without specifying it, some crazy things are possible even without taking the square root itself as an initial guess.
We'll assume we are allowed to use basic arithmetical operations. Without loss of generality, let $a>b>0$. Let $x=b/a$. Then $\sqrt{a^2+b^2}=a\sqrt{1+x^2}\approx a(1+x^2/2)$. So that is a good initial guess, especially if $x\ll1$. A more precise expansion can be obtained from Taylor series.
(Initially, this answer referred to another answer which is now gone, so I edited this one accordingly.)