Diabetic foot ulcers (DFUs) are a serious complication of diabetes and often result in amputation. Traditional wound care methods have limitations in addressing the complex pathophysiology of DFUs. Hydrogel dressings, a type of biomaterial, have emerged as promising candidates for treating DFUs due to their biocompatibility, ability to retain moisture, and potential to incorporate therapeutic agents. Hydrogels create a moist environment, promote cell migration, and reduce inflammation, thereby supporting wound healing. Incorporating bioactive molecules, such as growth factors and anti-inflammatory agents, can further enhance the effectiveness of hydrogels. Additionally, stem cells can be loaded into hydrogels to improve tissue regeneration and help modulate the wound microenvironment. Recent advancements in hydrogel technology have also led to the development of smart hydrogels that can respond to changes in wound conditions, such as glucose levels and pH. These intelligent dressings offer personalized care by delivering targeted treatments based on real-time wound data. This review explores the mechanisms behind DFU development, the role of hydrogels in wound healing, and recent progress in hydrogel technologies for personalized DFU care.