In order to reduce the environmental pollution caused by waste rubber and to realize the recycling of resources, we proposed a facile method for the hydrophilic modification of waste rubber powder (HRP) and used it to reinforce a composite hydrogel. In the presence of toluene, dibenzoyl peroxide (BPO) diffused into the waste rubber powder. After the solvent was removed, BPO was adsorbed in the rubber powder, which was used to initiate the grafting polymerization of the acrylamide monomer on the rubber–water interface. As a result, the polyacrylamide (PAM) molecular chains were grafted onto the surface of the rubber powder to realize hydrophilic modification. The success of the grafting modification was confirmed by FTIR, contact angle testing, and thermogravimetric analysis. The hydrophilic modified waste rubber powder was used to reinforce the PAM hydrogel. Mechanical tests showed that the tensile strength and elongation at the break of the composite hydrogel reached 0.46 MPa and 1809%, respectively, which was much higher than those of pure PAM hydrogel. Such a phenomenon indicates that the waste rubber particles had a strengthening effect.