Diabetic peripheral neuropathy (DPN), a common complication of type 2 diabetes mellitus (T2DM), significantly impairs postural control and increases fall risk due to sensory and motor nerve dysfunction. While conventional rehabilitation is widely used, the effectiveness of technology-assisted balance training remains underexplored. This quasi-experimental study aimed to compare the impact of Biodex Balance System (BBS)-based training versus traditional exercises on balance and coordination in patients with DPN. Thirty patients with T2DM and clinically confirmed DPN were allocated into two groups (n = 15 per group): the intervention group (BBS training) and the control group (traditional exercises). Both groups trained for 8 weeks. Static balance was assessed using stability indices and clinical balance tests. Statistical analysis included paired and independent t-tests, Shapiro–Wilk tests for normality, and Cohen’s d for effect size. The BBS group demonstrated statistically significant improvements across all balance measures compared to the control group. For the most challenging condition (unstable surface, eyes closed), the mean balance index improved by 0.66° (p < 0.001; Cohen’s d = 14.25). Substantial improvements were also observed for the stable surface (eyes open: Δ = 0.34°, p < 0.001, d = 4.01) and unstable surface (eyes open: Δ = 0.23°, p < 0.001, d = 7.46). Control group gains were modest and less consistent. Balance training using the Biodex Balance System significantly enhances static balance and postural control in patients with diabetic neuropathy, outperforming traditional rehabilitation methods. These findings support integrating the BBS into structured diabetic care programs to reduce fall risk and improve functional stability.