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Osteoarthritis is caused by the cartilage destruction of the bones of the joint surfaces and structures that produce synovium fluid. Osteoarthritis treatment includes the use of surgical methods and non-surgical or maintenance treatments including knee orthoses, medical insoles with external edges, use of physiotherapy techniques, exercise, weight loss in obese people, and teaching the principles of joint care. The main goal of treatment in osteoarthritis of the knee is to ameliorate physical function, decrease pain, and reduce the progression of the disease, through correcting the knee alignment and reducing the varus torque. Previous studies have indicated that medicinal plants and herbal nanoparticles (NPs) have the best anti-inflammatory effects. β-Cyclodextrin is a cyclic carbohydrate molecule that is used as a host to prepare inclusion complexes. In this study, the synthesis of nickel NPs is based on β-cyclodextrin (NiBCD NPs) for accelerating the osteoarthritis articular cartilage repair. The FT-IR and XRD techniques confirmed the formula of NiO for the NiBCD NPs. The FE-SEM imaging shows a non-spherical structure for NiBCD NPs with a size of less than 100 nm. In EDX, the signals at the energy levels of 8.3, 7.5, and 0.87 keV are assigned for the electron migration of Ni Kβ, Ni Kα, and Ni Lα. Furthermore, the signals for the elements of oxygen and carbon of BCD appeared at 0.52 and 0.28 keV. The effectiveness of NiBCD NPs in promoting chondrogenesis was examined in orthopedic experiments using primary cultured chondrocytes. Subsequently, we determined the functional restoration following NiBCD NPs’ transplantation in a knee osteoarthritis articular cartilage injury model. We conducted histological, PCR, and Western blot assays. In the immunological analysis, the levels of MMPs, IL-1β, TNF-α, and p-p65 expression were found to be reduced by NiBCD NPs. This reduction may be attributed to the regulation of cellular redox homeostasis through Nrf2. Furthermore, our findings demonstrated the positive impact of NiBCD NPs on stimulating chondrogenesis in vitro. Notably, the NiBCD NPs’ application accelerated the recovery of injury-induced dysfunction. Additionally, the presence of NiBCD NPs at the injury site suppressed abnormal fibrosis and angiogenesis. The histological assay revealed the chondrocytes’ proliferation and increased cartilage matrix synthesis in the NiBCD NPs’ presence.