Hydrogels are three-dimensional, hydrophilic polymer networks widely recognized for their potential in drug delivery systems (DDS) due to their high water content, excellent biocompatibility, and adjustable physical properties. These materials can incorporate a broad spectrum of therapeutic agents, including small molecules, proteins, and nucleic acids, enabling tailored and sustained drug release profiles. This review provides an in-depth analysis of hydrogel classification based on origin (natural or synthetic), type of crosslinking (physical or chemical), and responsiveness to external stimuli such as pH, temperature, or enzymatic activity. Various drug release mechanisms—such as diffusion, swelling, and matrix degradation—are discussed in detail. The integration of hydrogels with nanotechnology, biosensors, and tissue engineering has expanded their potential in regenerative medicine and personalized treatment approaches. As research advances, hydrogel-based DDS are poised to play a vital role in next-generation therapeutic strategies. This review highlights their significance in shaping the future of precision medicine.