The present invention relates to a process for preparing a humidity sensor based on resistive type porous Magnesium Ferrite (MgFe2O4) pellets and a humidity sensor thereof. More particularly, the present invention includes a synthesis process of preparing 30 to 40% porous MgFe2O4 pellets. The process further includes making Ohmic contacts on the porous MgFe2O4 pellets. The process is very cost effective and optimized to keep the resistance of the porous MgFe2O4 pellets in the range 200-300 MΩ. Further, the response and recovery time of the porous MgFe2O4 pellets to humidity is in the range of few seconds only. Further, the porous MgFe2O4 pellets can be used for humidity sensing for more than 12 months. Due to resistance stability even after long-term exposure in humidity, the porous MgFe2O4 pellets do not require flash heating. Further, the humidity sensor prepared according to the process is highly sensitive towards relative humidity changes as the same is based on the measurement of resistance changes as compared to known humidity sensors which are based on the measurement of capacitance changes.