Wound tissue regeneration and angiogenesis are dynamic processes that send physiological signals to the body. Thus, designing novel nanoscaffolds by understanding their surface modifications and toxicological response in a biological system with a potent anti-inflammatory response is a viable solution. In this respect, inspired by the surface chemistry, in the present work we focus on the chemical optimization of silver nanoscaffolds using surface cappings in order to understand their kinetic release behaviour in simulated wound fluids (SWF), to analyze their blood compatibility in human lymphocytes and erythrocytes and then embed them in a chitosan-agarose matrix (CAM) as a productive drug delivery system to evaluate excision wound tissue regeneration efficiency in Wistar rats. In this regard, polyvinyl alcohol capped silver nanocomposites (PVA-AgNPs) exhibit a dominant antibacterial efficacy with the sustained and controlled release of silver ions and percentage cell mortality and percentage hemolysis of only 10% and 16% compared with uncapped-AgNPs or silver bandaids (SBDs). Also, PVA-AgNP impregnated CAM (PVA-CAM) shows positive effects through their anti-inflammatory and angiogenic properties, with a nearly 95% healing effect within 9 days. The complete development of collagen and fibroblast constituents was also monitored in PVA-CAM by hematoxylin & eosin (H & E) and Masson trichrome (MT) staining. These results provide a clear insight into the development of a potent therapeutic formulation using CAM as a scaffold incorporated with surface functionalized PVA-AgNPs as a bioeffective and biocompatible polymer for the fabrication of efficacious silver wound dressing scaffolds in clinical practice.