Bio iron (II) nanoparticles can be natural preservative and a source of available iron. Bacillus subtilis ML6 supernatant reduced FeCl3, producing biological ferrous nanoparticles (Bio-Fe (II)NPs). Bio-Fe (II)NPs were crystalline, absorbed UV at the range 250–350 nm, inhibited pathogenic microbes and exhibited considerable scavenging activity. Yogurt was supplemented with bio-Fe (II)NPs at three levels (200, 400 and 800 μg/mL). BioFe (II)NPs (400 μg/mL) significantly (p ≤ 0.05) inhibited lipid oxidation by 72% after 3 weeks of cold preservation, while the total lactic acid bacterial count was not affected. Yogurt supplemented with Bio-Fe (II)NPs (200 μg/mL) had the highest color, taste, and flavor scores. Based on blood serum parameters and a toxicity experiment, the levels of 200 or 400 μg Bio-Fe (II)NPs/mL can safely prolong yogurt’s shelf life, enhance its quality and promote its iron (II) content. Blood iron parameters (HB, ferritin, transferrin, and iron content) values significantly (p ≤ 0.05) increased with raising Fe (II)NPs concentration within normal ranges.