Controlled size, shape and dispersibility of superparamagnetic iron oxide nanoparticles (SPIONs), has been achieved in a protein-polymer colloidal dispersion. Stable ferrofluid (FF) is synthesized in an aqueous medium of collagen, bovine serum albumin and poly(vinyl) alcohol that equilibrates with time, at ambient conditions, into an organized matrix with iron oxide particles sterically caged at defined sites. It mimics a biomineralization system; hence the process is termed biomimetics. Though the exact mechanism is not understood at this stage, we have established, with serial dilution of the protein-polymer solution that the SPIONs are formed inside the self-contained clusters of the two proteins and the polymer, which show a tendency to self assemble. More than the interparticle dipolar attractions of magnetic particles, electrostatic interactions play a role in cluster formation and collagen is responsible for the overall stability, supported by systematic dynamic light scattering data. The basic aim of this study was to increase magnetization of a previously synthesized ferrofluid without hampering stability, by reducing the total macromolecular concentration. Thrice the magnetization was achieved and in addition, the synthesized FFs exhibited very high transverse relaxivity and showed good contrast in mice liver, in the in vivo studies.