The investigation of collagen hydrolysates (CHs) is essential due to their widespread use in health, cosmetic, and therapeutic industries, attributing to the presence of bioactive dipeptides (DPs) and tripeptides (TPs). This study developed a novel targeted LC-MS/MS method with propyl-chloroformate (PCF) derivatization to measure three bioactive peptides—Hydroxyprolyl-glycine (Hyp-Gly), Glycyl-prolyl-hydroxyproline (Gly-Pro-Hyp), and Prolyl-hydroxyproline (Pro-Hyp)—in CHs, with strong correlation coefficients (0.992, 1.000, and 0.995, respectively) and low limits of detection (LODs) of 1.40, 0.14, and 1.16 µM, respectively. Untargeted Data Dependent Acquisition (DDA) analyses measured peptide size distribution, while amino acid analysis assessed nutritional content. Analysis of ten commercial CHs revealed similar amino acid profiles but varied peptide lengths, indicating diverse hydrolysis conditions. Products with higher proportions of smaller peptides showed elevated levels of the targeted bioactive peptides, suggesting that smaller peptide size may increase bioactivity. These findings can inform the optimization of CH supplements, providing consumers with detailed peptide content for more informed choices.