At about 10:10 MDT, a Piper PA-24-250 made a hard landing during a simulated engine-out approach at Gallatin Field. The flight instructor and the pilot received minor injuries, and the aircraft was substantially damaged. The pilots flight review was not current, and this was an instructional flight which he hoped would be the basis for renewing his review. During the flight, the instructor reduced the engine power to simulate an engine failure and instructed the pilot to land the aircraft. The pilot said he tried to stretch the glide to the runway, but the aircraft got too slow and the aircraft dropped in hard just after crossing the runway threshold.