While injectable in situ cross-linking collagen hydrogels offer great potential for applying stem cell therapy to regenerate articular cartilage via minimally invasive procedures, the encapsulated cells experience high shear stress during injection, which results in limited cell survival. In this study, surface-modified cellulose nanocrystals (CNCs) have been investigated as green and biocompatible reinforcing agents for collagen hydrogel. Aldehyde-functionalized CNCs (a-CNCs) were produced through a facile one-pot oxidation. A nanocomposite a-CNC/collagen hydrogel cross-linked rapidly by dynamic Schiff base bonds based on a-CNCs and collagen under physiological conditions. The a-CNC/collagen hydrogel exhibited fast shear-thinning, self-healing characteristics, and improved elastic modulus compared with CNC/collagen hydrogel without Schiff base bonds. The a-CNC/collagen hydrogel was then investigated for mesenchymal stem cell (MSC) delivery. MSCs encapsulated in the a-CNC/collagen hydrogel showed high cell viability after extrusion in vitro. Subcutaneous injection of MSCs encapsulated in the a-CNC/collagen hydrogel showed improved implant integrity and higher cell retention. The proposed self-healing collagen-based hydrogel would not only protect cells during injection but also fit into the irregular cartilage defect, thus holding promise in delivering MSCs for cartilage regeneration through minimally invasive procedures.