Hydrogel-based wound dressings are often chosen for healing diabetic foot ulcers (DFU) in combination with herbal extracts. Moringa oleifera leaf (MOL) extract is a potent herb containing antimicrobial and anti-inflammatory bioactive substances. In this work, wound dressings based on polyvinyl alcohol (PVA), MOL extract, and graphene oxide (GO) were developed for DFU wound dressing. The PVA/MOL/GO hydrogel was synthesized using four cycles of a freeze–thaw process with varying concentrations of MOL extract. All hydrogels showed a water content of 83–88% and an equilibrium swelling ratio between 155–171%. After degradation in phosphate-buffered saline, the hydrogels showed a more open porous structure. We observed a degradation rate of 26–28%. Although the increase in MOL extract reduced the tensile strength of the hydrogel, the addition of GO increased the tensile strength. The PVA/MOL/GO hydrogel showed the highest antibacterial activity, with a reduction of 94% Gram-positive S. aureus and 82% Gram-negative E. coli. Finally, all samples possessed appropriate cytocompatibility with cell viability reaching 83–135% in 3T3L1 mouse fibroblast cells. This result was verified by in vitro wound-healing analysis performed by scratch assay. This study presents the potency of combined PVA, MOL, and GO as a biocompatible DFU wound dressing.