Tissue engineering and regenerative medicine approaches are being actively developed for degenerative disorders, including osteoarthritis (OA). Decellularized matrix (dECM) is a promising biomaterial; however, glycosaminoglycan (GAG) loss during decellularization limits its chondrogenic potential. In this study, we aimed to overcome this by developing a dECM hydrogel originating from cartilage, functionalized with the GAG chondroitin sulphate (CS), to replenish those originally depleted and incorporating quercetin to enhance hydrogel properties and chondrogenesis. An optimized decellularization protocol efficiently removed DNA, but with a significant loss of GAGs (73%). After dECM solubilization, functionalization with CS or aldehyde modified CS (mCS) was performed. CS-functionalized hydrogels maintained low stiffness compared to non-functionalized hydrogel, while 0.2 mg/mL mCS hydrogels exhibited significantly slower gelation kinetics. To aid the hydrogel's chondrogenic ability, a novel approach using quercetin was investigated. Incorporation of 0.3 mg/mL quercetin in 0.4 mg/mL mCS-functionalized hydrogels resulted in increased gel stiffness. The impact on cell viability and chondrogenic differentiation was evaluated. Results showed similar cell viability in dECM and CS-functionalized hydrogels at 1 and 3 days of culture, with no significant changes in gene expression of chondrogenic and hypertrophic genes. In quercetin-containing hydrogels, the viability of human dermal fibroblasts was not significantly different from non-functionalized hydrogels, while human chondrocytes showed a significant upregulation of collagen type II, with 6.6- and 2.2-fold increases for 0.15 and 0.3 mg/mL quercetin, respectively. These results provide an initial proof-of-concept for dECM functionalization strategies that restore lost CS while incorporating quercetin, creating a microenvironment favorable for cartilage repair.