Transdermal delivery systems are emerging platforms for the delivery of donepezil hydrochloride (DH) for treating Alzheimer's disease. The primary aim of this study was to develop polyvinyl alcohol and polyvinyl pyrrolidone blended hydrogels and to evaluate their feasibility for delivering DH via a transdermal route. Physicochemical properties, such as gel fraction (%), swelling ratio (%), weight loss (%), mechanical strength, elongation at break, and Young's modulus of the prepared hydrogels were evaluated. Furthermore, in vitro skin permeation and in vivo pharmacokinetic studies were performed. With an increased concentration of propylene glycol (PG), the gel fraction (%), maximum strength, and elongation at break decreased. However, the swelling ratio (%) and weight loss (%) of hydrogels increased with increased PG content. The 26% PG-hydrogel was superior, with an enhancement ratio of 12.9 (*** p < 0.001). In addition, the 11% PG-hydrogel and 1% PG-hydrogel exhibited an enhancement ratio 6.30-fold (*** p < 0.001) and 2.85-fold (* p < 0.05) higher than that exhibited by control, respectively, indicating a promising effect of PG on skin permeation. In addition, in vivo pharmacokinetic studies on hairless rats assessed the expediency for transdermal delivery of DH. The transdermal delivery of optimized hydrogel-patches with two different doses of DH revealed that the maximum plasma concentration and area under the curve were dose dependent, and the time to reach the maximum concentration was 8 h. Thus, optimized hydrogels have the potential to enhance the transdermal delivery of DH and could be a novel clinical approach.