This study introduces a novel injectable, dynamically crosslinked hydrogel composite delivery system, diacerein microspheres (DIA-MS) encapsulated within a hydrogel matrix (DIA-MS@gel), for the potential treatment of osteoarthritis (OA). DIA-MS was fabricated using a T-junction microfluidic device. The injectable hydrogel was synthesized through the reaction of oxidized hyaluronic acid (OHA), quaternized chitosan (QCS), and adipic acid dihydrazide (ADH). Subsequently, DIA-MS was encapsulated into the hydrogel to form the DIA-MS@gel composite. The DIA-MS@gel was characterized by morphology, swelling behavior, pH response, degradability, and drug release kinetics. In vitro experiments showed that DIA-MS@gel could effectively prolong the drug release time to 47 days and showed pH-responsive degradation behavior. In vivo studies in rabbits indicated that intra-articular (IA) injection of DIA-MS@gel facilitated articular cartilage repair. The DIA-MS@gel provided continuous drug release for over 31 days within the rabbit joint cavity, potentially reducing administration frequency, attenuating inflammation, and promoting bone tissue regeneration. Furthermore, the DIA-MS@gel exhibited excellent biocompatibility, suggesting its potential as a practical clinical approach for managing OA.