To manage urban ecological ecosystems adequately, understanding the urban areas’ biophysical characteristics is required. This study developed a settlement surface ecological index (SSEI) using tree, soil, impervious surface and grass covers, land surface temperature (LST), and soil moisture derived from Satellite Pour L’Observation de la Terre (SPOT) 7 and Landsat 8 satellite images. The assessment of the SSEI was conducted over twelve sites of 300 m by 300 m. The selected sites contained formal and informal settlements of varying building densities. The SSEI values ranged from −0.3 to 0.54. Seven assessed areas are in the worst ecological condition with an SSEI below zero. Only three settlement types had an SSEI index value of 0.2 and above, and two of these areas were informal settlements. The formal low-density settlement with higher tree coverage displayed the highest index value of 0.54, slightly higher than the medium-density informal settlement. Overall, there is no significant difference in the SSEI values between the surface ecological condition of formal and informal settlements. The results achieved in this study can be used to understand urban ecology better and develop urban greening strategies at a city or settlement level.