ABSTRACT The study presents a theoretical framework for understanding the role of dark matter on the stability of the galactic disc. We model the galaxy as a two-component system consisting of stars and gas in equilibrium with an external dark matter halo. We derive the equations governing the growth of perturbations and obtain a stability criterion that connects the potential of the dark matter halo and the gas fraction with the stability levels of the galaxy. We find that a two-component disc is more susceptible to the growth of gravitational instabilities than individual components, particularly as gas fractions increase. However, the external field, due to the dark matter halo, acts as a stabilizing agent and increases the net stability levels even in the presence of a cold gas component. We apply the stability criterion to models of the Milky Way, low surface brightness galaxies, and baryon-dominated cold rotating disc galaxies observed in the early universe. Our results show that the potential due to the dark matter halo plays a significant role in stabilizing nearby galaxies, such as the Milky Way, and low surface brightness galaxies, which would otherwise be prone to local gravitational instabilities. However, we find that the baryon-dominated cold disc galaxies observed in the early universe remain susceptible to the growth of local gravitational instabilities despite the stabilizing effect of the dark matter halo.