Individuals with diabetes often get fungal infections from Candida albicans, according to the American Diabetes Association. Candida albicans infections cause itchy, moist and red rashes in most areas of the skin. In addition, poor circulation related to diabetes can cause localized itching, especially in the lower legs.
Tiny blisters and scales accompany Candida albicans rashes, reports the American Diabetes Association. Candida albicans is a fungus similar to yeast. It usually targets moist and warm folds of skin. Jock itch, athlete's foot, ring worm and vaginal infection are other common fungal infections that occur in individuals with diabetes. Dry skin can also cause localized itching.