Herein, we envisage the possibility of preparing stable cationic poly(lactic-co-glycolic acid) (PLGA) microspheres encapsulating the iron oxide nanoparticles (IONPs; 8–12 nm). The IONPs are incorporated into PLGA in organic phase followed by microsphere formation and chitosan coating in aqueous medium via nano-emulsion technique. The average size of the microspheres, as determined by dynamic light scattering are about 310 nm, while the zeta potential for the composite remains near 35 mV at pH 4.0. These microspheres are electrophoretically deposited onto indium tin oxide (ITO)-coated glass substrate used as cathode and parallel platinum plate as the counter electrode. This platform is utilized to fabricate a DNA biosensor, by immobilizing a probe sequence specific to Escherichia coli. The bioelectrode shows a surface-controlled electrode reaction with the electron transfer coefficient (α) of 0.64 and charge transfer rate constant (ks) of 61.73 s−1. Under the optimal conditions, this biosensor shows a detection limit of 8.7 × 10−14 M and is found to retain about 81% of the initial activity after 9 cycles of use.