Is there any option in Zabbix configuration which allows PHP frontend to show list of Hosts in language specific order?
Collation set to "utf8_unicode_ci" might be good enough.

Yes, my Zabbix database is in utf8.
Setting collation to "utf8_unicode_ci" for column "name" in table "hosts" only helps when I issue sql query "select name from hosts order by name". It won't affect PHP frontend.