Despite the historical use of T. cordifolia in Ayurveda for diabetes, its potential for promoting diabetic wound healing remains unexplored. This study evaluated the diabetic wound healing ability of aqueous ethanolic stem extract of T. cordifolia (AETC) in streptozotocin-nicotinamide (STZ-NAD) induced diabetic rats. AETC extracts were extracted using 70% aqueous ethanolic solvent via Soxhlet extraction. A full-thickness excision wound was created on the dorsal skin of STZ-NAD-induced diabetic rats and followed by a 14-day treatment with AETC extract at high (500 mg/kg) and low (250 mg/kg) doses. The key parameters, including blood glucose levels, wound contraction percentage, and epithelisation time were evaluated. Wound tissues were collected for histopathological analysis. Oral administration of AETC significantly reduced blood glucose levels over 14 days (p ≤ 0.01) and notably improved the percentage of wound contraction compared to diabetic controls (p < 0.05). Both doses also displayed significant improvement in epithelisation time (p < 0.05). Histopathological analysis consistently unveiled the healing of the epidermis, a reduction in inflammation, as well as the enhancement of granulation tissue formation and collagen deposition. This study demonstrated the potential ability of AETC not only in lowering the blood glucose level but also in ameliorating diabetic wound healing.