Insulin entrapped alginate-gum tragacanth (ALG-GT) hydrogels at different ALG replacement ratios (100, 75, 50, 25) were prepared through an ionotropic gelation method, followed by chitosan (CH) polyelectrolyte complexation. A mild gelation process without the use of harsh chemicals was proposed to improve insulin efficiency. Retention of almost the full amount of entrapped insulin in a simulated gastric environment and sustained insulin release in simulated intestinal buffer indicated the pH sensitivity of the gels. Insulin release from hydrogels with different formulations showed significant differences (p < 0.05). Time domain (TD) NMR relaxometry experiments also showed the differences for different formulations, and the presence of CH revealed that ALG-GT gel formulation could be used as an oral insulin carrier at optimum concentrations. The hydrogels formulated from biodegradable, biocompatible, and nontoxic natural polymers were seen as promising devices for potential oral insulin delivery.