Diabetic wound healing presents a significant clinical challenge due to the interplay of systemic metabolic disturbances and local inflammation, which hinder the healing process. Macrophages undergo a phenotypic shift from M1 to M2 during wound healing, a transition pivotal for effective tissue repair. However, in diabetic wounds, the microenvironment disrupts this phenotypic polarization, perpetuating inflammation, and impeding healing. Reprograming macrophages to restore their M2 phenotype offers a potential avenue for modulating the wound immune microenvironment and promoting healing. This review elucidates the mechanisms underlying impaired macrophage polarization toward the M2 phenotype in diabetic wounds and discusses novel strategies, including epigenetic and metabolic interventions, to promote macrophage conversion to M2. Hydrogels, with their hydrated 3D cross-linked structure, closely resemble the physiological extracellular matrix and offer advantageous properties such as biocompatibility, tunability, and versatility. These characteristics make hydrogels promising candidates for developing immunomodulatory materials aimed at addressing diabetic wounds. Understanding the role of hydrogels in immunotherapy, particularly in the context of macrophage reprograming, is essential for the development of advanced wound care solutions. This review also highlights recent advancements in immunotherapeutic hydrogels as a step toward precise and effective treatments for diabetic wounds.