It has been recently reported that for some suspensions of magnetic nanoparticles the transverse proton relaxation rate, R(2), is dependent on the time that the sample is exposed to an applied magnetic field. This time dependence has been linked to the formation of linear aggregates or chains in an applied magnetic field via numerical modeling. It is widely known that chain formation occurs in more concentrated ferrofluids systems and that this has an affect on the ferrofluid properties. In this work we examine the relationships between colloidal stability, the formation of these linear structures, and changes observed in the proton transverse relaxation rate of aqueous suspensions of magnetic particles. A series of iron oxide nanoparticles with varying stabilizing ligand brush lengths were synthesized. These systems were characterized with dynamic light scattering, transmission electron microscopy, dark-field optical microscopy, and proton transverse relaxation rate measurements. The dark field optical microscopy and R(2) measurements were made in similar magnetic fields over the same time scale so as to correlate the reduction of the transverse relaxivity with the formation of linear aggregates. Our results indicate that varying the ligand length has a direct effect on the colloidal arrangement of the system in a magnetic field, producing differences in the rate and size of chain formation, and hence systematic changes in transverse relaxation rates over time. With increasing ligand brush length, attractive inter-particle interactions are reduced, which results in slower aggregate formation and shorter linear aggregate length. These results have implications for the stabilization, characterization and potentially the toxicity of magnetic nanoparticle systems used in biomedical applications.