An eco-friendly extraction process of polyphenols from conventional dried rosemary tissues and post-distillation waste residues was applied using β-cyclodextrin as a co-solvent. The aqueous extracts were characterized by measuring the total phenolic content, and their phenolic compounds were identified and quantified by LC-MS. Sodium alginate solutions (2% w/w) with/without incorporation of rosemary aqueous extracts were prepared and used for the preparation of O/W emulsions containing 20% rapeseed oil and an 80% water phase. Hydrogel beads were then stored at 20 °C for 28 days. The quality of encapsulated oil during storage was evaluated by measurements of the peroxide value, p-anisidine value, free fatty acids, total oxidation value, and fatty acid composition, whilst the aqueous phase of the beads was analyzed for its total extractable phenolic content (TEPC). The experimental findings indicate that the incorporation of aqueous extracts from post-distillation rosemary residues in emulsion-filled hydrogel beads resulted in the lowest level of oxidation products in the encapsulated rapeseed oil (PV = 10.61 ± 0.02 meq/Kg oil, p-AnV = 4.41 ± 0.09, and FFA = 0.14 ± 0.00, expressed as % oleic acid content), indicating an acceptable oil quality until the end of the storage period.