Drought stress critically hinders agricultural productivity, especially in arid and semi-arid zones. The results of this study show that the application of watermelon rind-based hydrogels (WR hydrogels), synthesized from a watermelon rind, acrylic acid (AA), and acrylamide (AAm), significantly enhanced soil water retention by 77.46% at a 0.3% concentration, increasing the plant height by 28.98% and biomass by 35.28% under controlled greenhouse conditions (25 °C/20 °C day/night temperature cycle, with a 12 h photoperiod at 400–500 μmol·m−2·s−1 of illuminance and 30–40% relative humidity). The accumulation of proline and soluble sugars decreased, indicating reduced osmotic stress in barley subjected to mild and severe drought conditions (6–15% FC and 17–26% FC). The chlorophyll content rose by 16.36%, boosting photosynthetic activity. A correlation and principal component analysis further highlighted the positive effects of hydrogel addition on plant growth and drought resistance. These findings underscore the potential of WR hydrogels as an effective soil amendment for promoting sustainable agriculture in water-limited conditions.