We investigated the magneto-optical (MO) effect with localized surface plasmon resonance (LSPR) on ferromagnetic metal (Fe and Co) nanoparticles. We estimated the electric-field enhancement of the ferromagnetic metal nanoparticles caused by LSPR based on Mie scattering theory and compared it with that of Au nanoparticles. The electric-field enhancement of the ferromagnetic metal nanoparticles was 15–17, which is half of that of the Au nanoparticles. In order to explain the calculated results, we prepared ferromagnetic metal nanoparticles by a self-assembly process. We measured the optical transmission spectra and Faraday effect of the ferromagnetic nanoparticles. Although remarkable MO enhancement was not observed, we found characteristic MO spectra and a peak shift at wavelengths longer than 800 nm in samples whose thickness was less than 6 nm. We numerically investigated the size effect and reproduced the experimental results. We concluded that localized plasmons of ferromagnetic metal nanoparticles can produce electric-field enhancement, but the enhancement is not enough to increase the MO effect, and that the MO effect of nanosized ferromagnetic metals could be influenced by size effects rather than by LSPR.