Portable, custom-made electronic dynamometry for the foot and ankle is a promising assessment method that enables foot and ankle muscle function to be established in healthy participants and those affected by chronic conditions. Diabetic peripheral neuropathy (DPN) can alter foot and ankle muscle function. This study assessed ankle toque in participants with diabetic peripheral neuropathy and healthy participants, with the aim of developing an algorithm for optimizing the precision of data processing and interpretation of the results and to define a reference frame for ankle torque measurement in both healthy participants and those affected by DPN. This paper discloses the software chain and the signal processing methods used for voltage—torque conversion, filtering, offset detection and the muscle effort type identification, which further allowed for a primary statistical report. The full description of the signal processing methods will make our research reproducible. The applied algorithm for signal processing is proposed as a reference frame for ankle torque assessment when using a custom-made electronic dynamometer. While evaluating multiple measurements, our algorithm permits for a more detailed parametrization of the ankle torque results in healthy participants and those affected by DPN.