The objective of this study to conduct finite difference analysis for investigating the rotordynamic characteristics of a hydrodynamic journal bearing (HDJB) filled with ferrofluid for lubrication and with herringbone grooves inside. The small-sized journal bearing serves well as the candidate for supporting high-speed rotating spindles of data-storage drives; such as hard disc drives and optical disc derives. The analysis results are expected to serve for distilling design guidelines of these small HDJBs with main goals of reaching higher stiffnesses and simultaneously owns largest stability margin, the mostly-common design goals of small HDJBs. To fulfill the aforementioned goal, the present study starts with building the mass flux equations of the grooved bearing filled with ferrofluid, which is followed by the discretization over the bearing clearance domain and derivation of finite difference equations based on mass flow balance over the clearance domain. Finally, the pressure distribution of fluid film, stiffnesses, damping coefficients, and critical mass are computed. Results show the capability of the ferrofluid to alter or even improve the general dynamic characteristics of a grooved journal bearing.