Herein, dexamethasone (DEX) nanocrystalline suspension (NS)-embedded hydrogel (NS-G) was constructed using a hydroxypropyl methylcellulose (HPMC) polymer to enhance cochlear delivery and attenuate hearing loss following intratympanic (IT) injection. Hydrophobic steroidal nanocrystals were prepared using a bead milling technique and incorporated into a polysaccharide hydrogel. The NS-G system with HPMC (average molecular weight, 86,000 g/mol; 15 mg/mL) was characterized as follows: rod-shaped drug crystalline; particle size <300 nm; and constant complex viscosity ≤1.17 Pa·s. Pulverization of the drug particles into submicron diameters enhanced drug dissolution, while the HPMC matrix increased the residence time in the middle ear cavity, exhibiting a controlled release profile. The IT NS-G system elicited markedly enhanced and prolonged drug delivery (> 9 h) to the cochlear tissue compared with that of DEX sodium phosphate (DEX-SP), a water-soluble prodrug. In mice with kanamycin- and furosemide-induced ototoxicity, NS-G markedly enhanced hearing preservation across all frequencies (8–32 kHz), as revealed by an auditory brainstem response test, compared with both saline and DEX-SP. Moreover, treatment with NS-G showed enhanced anti-inflammatory effects, as evidenced by decreased levels of inflammation-related cytokines. Therefore, the IT administration of DEX NS-loaded HPMC hydrogels is a promising strategy for treating hearing loss.