Diabetic foot ulcers (DFUs) often remain untreated because they are difficult to heal, caused by reduced skin sensitivity and impaired blood vessel formation. In this study, we propose a novel approach to manage DFUs using a multifunctional hydrogel made from a combination of alginate and gum arabic. To enhance the healing properties of the hydrogel, we immobilized nerve growth factor (NGF), within specially designed mesoporous silica nanoparticles (MSN). The MSNs were then incorporated into the hydrogel along with carnosine (Car), which further improves the hydrogel's therapeutic properties. The hydrogel containing the immobilized NGF (SiNGF) could control the sustain release of NGF for >21 days, indicating that the target hydrogel (AG-Car/SiNGF) can serve as a suitable reservoir managing diabetic wound regeneration. In addition, Car was able to effectively reduce inflammation and significantly increase angiogenesis compared to the control group. Based on the histological results obtained from diabetic rats, the target hydrogel (AG-Car/SiNGF) reduced inflammation and improved re-epithelialization, angiogenesis, and collagen deposition. Specific staining also confirmed that AG-Car/SiNGF exhibited improved tissue neovascularization, transforming growth factor-beta (TGFβ) expression, and nerve neurofilament. Overall, our research suggests that this newly developed composite system holds promise as a potential treatment for non-healing diabetic wounds.