Some of thermo-responsive polysaccharides, namely, cellulose, xyloglucan, and chitosan, and protein-like gelatin or elastin-like polypeptides can exhibit temperature dependent sol–gel transitions. Due to their biodegradability, biocompatibility, and non-toxicity, such biomaterials are becoming popular for drug delivery and tissue engineering applications. This paper aims to review the properties of sol–gel transition, mechanical strength, drug release (bioavailability of drugs), and cytotoxicity of stimuli-responsive hydrogel made of thermo-responsive biopolymers in drug delivery systems. One of the major applications of such thermos-responsive biopolymers is on textile-based transdermal therapy where the formulation, mechanical, and drug release properties and the cytotoxicity of thermo-responsive hydrogel in drug delivery systems of traditional Chinese medicine have been fully reviewed. Textile-based transdermal therapy, a non-invasive method to treat skin-related disease, can overcome the poor bioavailability of drugs from conventional non-invasive administration. This study also discusses the future prospects of stimuli-responsive hydrogels made of thermo-responsive biopolymers for non-invasive treatment of skin-related disease via textile-based transdermal therapy.