Terahertz (THz) spectroscopy is a technique proving extremely useful for investigating various biomedical applications by virtue of its high sensitivity in the measurement of water content and non-ionizing nature. By combining this with sparse deconvolution, the THz response of skin directly underneath transdermal drug delivery (TDD) patches was isolated and reconstructed to determine the skin water content in vivo. Verification for this method was given by a comparison of skin measured through patches using sparse deconvolution, and skin measurements immediately following patch removal processed with standard approaches. It was found that patches with a non-permeable film backing hydrated the skin to a greater extent than permeable woven polyester fiber backed patches and that this hydration effect primarily occurs within the first 30 minutes of patch application and lasts for at least 24 hours given that the patch remains applied. We demonstrate the effectiveness of this sparse reconstruction method to track hydration levels through layers such as patches and identify scope for further applications including TDD patch development and wound healing techniques and monitoring.