Improving nanoparticles (NPs) transport across biological barriers is a significant challenge that could be addressed through understanding NPs diffusion in dense and confined media. Here, we report the ability of soft NPs to shrink in confined environments, therefore boosting their diffusion compared to hard, non-deformable particles. We demonstrate this behavior by embedding microgel NPs in agarose gels. The origin of the shrinking appears to be related to the overlap of the electrostatic double layers (EDL) surrounding the NPs and the agarose fibres. Indeed, it is shown that screening the EDL interactions, by increasing the ionic strength of the medium, prevents the soft particle shrinkage. The shrunken NPs diffuse up to 2 orders of magnitude faster in agarose gel than their hard NP counterparts. These findings provide valuable insights on the role of long range interactions on soft NPs dynamics in crowded environments, and help rationalize the design of more efficient NP-based transport systems.