We theoretically investigate the properties of optical propagation in one-dimensional soft photonic crystals based on ferrofluids using the transfer matrix method. The proposed structure is composed of an alternating ferrofluid layer and a dielectric layer. Ferrofluids are composed of suspended ferromagnetic nanoparticles coated with silver, which has a frequency-dependent dielectric function. Core-shell nanocomposites incorporating an optical signature with magnetic response are particularly useful. The calculated results of dispersion relation show that tunable band gaps can be realized by varying the local magnetic field factor α, the shell thickness parameter t, or the filling fraction ν of the ferrofluid layer. An additional band gap appears in the lower frequency region due to the absorption. These band gaps blue shift when the external magnetic field is enhanced, and red shift when either t or ν is increased. We also extend our analysis to the variation of band width. To meet the requirements of optical devices, such a tunable structure can be used to design optical filters, modulators and waveguides.