Polyvinyl alcohol (PVA) hydrogels have a wide range of applications in the pharmaceutical and biomedicine fields due to their exceptional biophysical properties. The study focuses on preparing and characterizing capsule-shaped PVA hydrogels to enhance their biocompatibility and porosity for controlled glucose release and cell proliferation. The hydrogels were prepared using different concentrations (Cs) and molecular weights (MWs) of PVA, with two different lengths, A (10 mm) and B (20 mm), to control glucose release over 60 min. The preparation process involved PVA gel preparation and PVA hydrogel formation. A total of 500 µL of glucose was injected into all dehydrated hydrogels in groups A and B. Glucose release was studied by immersing the hydrogels in saline at 37 °C with stirring at 500 rpm. The SUP-B15 cell line was grown in six A1 hydrogels for biocompatibility testing. The results indicate that all hydrogels remained stable at 37 °C without degrading. Those with a higher C and MW exhibited a denser and less porous structure, lower glucose storage capacity, and higher elongation at break. Significant differences in glucose release, diffusion speed, and flux were observed, which were more evident in A1 > A4, B1 > B4, and B1 > A1 over 60 min. A1 and B1 had higher values because their higher porosity distribution allowed glucose to diffuse more easily. B1, being larger, has more glucose due to its increased length. The cell growth response and viability at 48 h in contact with the hydrogels was similar to that of the control (4.5 × 105 cells/mL, 98.5% vs. 4.8 × 105 cells/mL, 99.7% viability), thus demonstrating biocompatibility. The hydrogels effectively released glucose over 60 min, with variations based on porosity, C, MW, and length, and demonstrated good biocompatibility with the cell line.