Diabetic foot ulcers (DFUs) are one of the most prevalent complications associated with diabetes mellitus. DFUs are chronic injuries that often lead to non-traumatic lower extremity amputations, due to persistent infection and other ulcer-related side effects. Moreover, these complications represent a significant economic burden for the healthcare system, as expensive medical interventions are required. In addition to this, the clinical treatments that are currently available have only proven moderately effective, evidencing a great need to develop novel strategies for the improved treatment of DFUs. Hydrogels are three-dimensional systems that can be fabricated from natural and/or synthetic polymers. Due to their unique versatility, tunability, and hydrophilic properties, these materials have been extensively studied for different types of biomedical applications, including drug delivery and tissue engineering applications. Therefore, this review paper addresses the most recent advances in hydrogel wound dressings for effective DFU treatment, providing an overview of current perspectives and challenges in this research field.