In this simulation, we have critically investigated the incorporation of 5 nm Al0.65Ga0.35N/GaN/Al0.65Ga0.35N (1 nm/3 nm/1 nm) double heterostructure as a hole source layer to improve the internal quantum efficiency (IQE), light output power (LOP), efficiency droop, and device stack size of AlGaN-based ultraviolet-C (UV-C) light emitting diodes. Due to 5 nm Al0.65Ga0.35N/GaN/Al0.65Ga0.35N (1 nm/3 nm/1 nm) double heterostructure as hole source layer, the overall stack size has been reduced by 7%. This leads to improvement of the carrier confinement and hence the radiative recombination (RR) rate of the proposed structure. The incorporation of Al0.65Ga0.35N/GaN/Al0.65Ga0.35N (1 nm/3 nm/1 nm) double heterostructure hole source layer reduces the carrier spill-off from the quantum wells by increasing the potential barrier height for electrons (from 284.7 to 697.37 meV) in the conduction band. The decrease in the internal electric field of the quantum wells (from 62.4 to 52.9 eV/μm) confirms the reduction of quantum confined stark effect (QCSE) in the proposed structure. The reduction of QCSE and the enhancement of carrier injection increase the RR rate by approximately ninefold for all the quantum wells in the proposed structure compared to the control one, hence improving the IQE and the LOP by ~47% and approximately tenfold, respectively. Also, the efficiency droop is promisingly improved in AlGaN-based UV-C LED.