The cryoprotective activity of gelatin hydrolyzed by papaya latex enzymes with the degree of hydrolysis (DH) of 5, 10, 15, and 20% was investigated. The cryoprotective activity of gelatin, as determined by thermal hysteresis, increased as DH increased up to 15% (9.14–16.60 °C) and decreased as DH of 20% (11.66 °C). The gelatin hydrolysate with DH of 15% (G15), which showed the highest thermal hysteresis, was subjected to fractionation and cryoprotective effect study in Pacific white shrimp. The fractionated peptide with the highest thermal hysteresis had a molecular weight of 1.7–4.2 kDa (18.81 °C). According to the study of the cryoprotective effect in Pacific white shrimp, the weight of shrimp gained 7.33% after soaking in the G15, which was significantly lower and higher than the weight gain of shrimp treated with mixed phosphates (16.12%) and distilled water (0.82%), respectively (P < 0.05). The shrimp treated with mixed phosphates and G15 had no exudate. The thawing loss of the shrimp treated with distilled water, mixed phosphates, and G15 after the different freeze-thaw cycles ranged from 7.43–9.25, 3.34–3.57, and 3.39–5.39%, respectively. The shrimp treated with G15 and mixed phosphate could retard shrimp quality loss from the freeze-thawing, as noticed by the lower reduction of exudate loss, thawing loss, freezable water content, Ca2+-ATPase activity, and the higher protein solubility than the treatment of water. Therefore, the gelatin hydrolysate could be a potential alternative cryoprotectant in frozen raw shrimp.