Individuals with diabetes frequently face serious challenges, including delayed wound healing and increased risk of infection. Notably, the regeneration of hair follicles plays a crucial role in accelerating diabetic skin damage repair, reducing the risk of infection, and enhancing overall skin health. Research has predominantly emphasized the re-epithelialization of diabetic wounds, with a paucity of in-depth studies on hair follicle regeneration. In the current study, we explored the effects of a bioactive amphibian-derived peptide, Cy RL-QN15, on promoting hair regeneration in a diabetic skin model. In vivo experiments demonstrated that local treatment with Cy RL-QN15 not only accelerated wound healing of scalded skin on the backs of diabetic Kunming (KM) mice but also improved growth of damaged hair follicles. Additionally, back-shaved diabetic C57BL/6 mice showed a significant increase in the growth of newly formed hair after 28 days of continuous Cy RL-QN15 treatment. Further analysis indicated that the hair-regenerating effects of Cy RL-QN15 were closely associated with the proliferation and migration of hair follicle stem cells (HFSCs). Cy RL-QN15 enhanced intracellular β-catenin expression by binding to the Frizzled-7 receptor on the surface of HFSCs. The up-regulation in β-catenin modulated the levels of downstream proteins, such as c-MYC, Cyclin D1, and Lef1, ultimately inducing hair regeneration. This study not only reveals the robust effects of the bioactive peptide Cy RL-QN15 in hair follicle regeneration but also provides novel avenues for the development of more targeted and effective therapeutics for diabetic wound healing in the future.