For biomedical applications, smart materials that are used as sensors or actuators have to match some criteria, especially bio-compatibility and softness. Smart polymers are candidates that fulfill these two criteria. A sensitivity to compression is created by adding magnetic particles to a compressible foam polymer. A foam-based composite is fabricated for its small Poisson’s ratio, which enables significant compression, up to 50%. This large compression induces a change in its magnetic properties, which can be detected using coils. By setting the sensing coils as a compact array of 3 × 3, the sensor successfully detected and localized an applied deformation.