Type 2 diabetes mellitus (T2DM) is a potential risk factor for the development of COVID-19 and is associated with higher severity and mortality rates. T2DM patients are commonly treated with metformin monotherapy or metformin plus sitagliptin. In the present case-control, single-center cohort study, a total number of 112 T2DM patients suffering from COVID-19 and aged 44–62 years old were compared with 78 T2DM patients without COVID-19 and aged 42–56 years old. Both the patient group and the control group were allocated into four groups. Group A: T2DM patients with COVID-19 on metformin treatments plus standard therapy (n = 60); group B: T2DM patients with COVID-19 on metformin plus sitagliptin plus standard therapy (n = 52); group C: T2DM patients without COVID-19 on metformin treatments (n = 40); and group D: T2DM patients without COVID-19 on metformin plus sitagliptin (n = 38). The investigation duration was 2–3 weeks. Anthropometric measurements, serological and biochemical investigations, pulmonary radiological findings, and clinical outcomes were evaluated. Only 101 T2DM patients with COVID-19 continued the study, 71 (70.29%) with mild-moderate COVID-19 and 30 (29.7%) with severe COVID-19 were compared with 78 T2DM patients as a control. Inflammatory biomarkers (C reactive protein, ferritin, and procalcitonin), a lung injury biomarker (lactate dehydrogenase), and a coagulopathy biomarker (D-dimer) were elevated in severe COVID-19 patients compared with mild-moderate COVID-19 (p < 0.05) and T2DM patients (p < 0.05). However, metformin plus sitagliptin was more effective than metformin monotherapy in T2DM patients with COVID-19, as evidenced by the mitigation of oxidative stress, CT scan score, and clinical outcomes. The present study confirmed the protective effects of this combination against the development of COVID-19 severity, as most T2DM COVID-19 patients develop mild-moderate forms. Herein, the combination of metformin and sitagliptin may lead to more beneficial effects than metformin monotherapy.