The objective of this study was to fabricate and evaluate a pH sensitive cross-linked polymeric network through the free radical polymerization technique for the model drug, cyclophosphamide, used in the treatment of non-Hodgkin’s lymphoma. The Hydrogels were prepared using a polymeric blend of agarose, Pluronic acid, glutaraldehyde, and methacrylic acid. The prepared hydrogels were characterized for drug loading (%), swelling pattern, release behavior, the ingredient’s compatibility, structural evaluation, thermal integrity, and toxicity evaluation in rabbits. The new polymer formation was evident from FTIR findings. The percentage loaded into the hydrogels was in the range of 58.65–75.32%. The developed hydrogels showed significant differences in swelling dynamics and drug release behavior in simulated intestinal fluid (SIF) when compared with simulated gastric fluid (SGF). The drug release was persistent and performed in a controlled manner for up to 24 h. A toxicity study was conducted on white albino rabbits. The developed hydrogels did not show any signs of ocular, skin, or oral toxicity; therefore, these hydrogels can be regarded as safe and potential carriers for controlled drug delivery in biomedical applications.