Peptide-based hydrogels were formed using low molecular weight peptides (LMWPs) derived from diphenylalanine as gelling agents. Sodium alginate (SA)was incorporated into the peptide skeleton to form a double-cross-linked hydrogel. The self-assembling mechanism was investigated by NMR, and the gelation behavior was studied by rheological tests. Hydrogen bonding and π-π stacking interactions play important roles in self-assembling of LMWPs. The rheological tests showed that the single-cross-linked hydrogel was formed by self-assembling AcNH-Thr-Phe-Phe-CONH2 (AcTFFNH2, critical gelling concentration: 0.3 wt%), and the gelation temperature was in a range of 8–12 °C depending on the concentration of AcTFFNH2. The rigidity, stability and self-healing of the binary composite hydrogels were enhanced particularly when the content of AcTFFNH2 and SA were 0.5 wt% and 0.3 wt%, respectively. Significant improvement of properties could be attributed to the double-cross-linking and enfolding in the assembled fibers with SA. These results indicate that peptide-based hydrogels formed by low molecular weight peptides have potential applications in the food industry.