With the help of Stokes operator Ŝ2 squeezed state (also called polarization squeezed state (PSS)) of 795 nm light, rubidium-87 (87Rb) atomic magnetometer based on Faraday rotation (FR) has been implemented and characterized. The PSS of Stokes operator Ŝ2 of 795 nm light has been prepared by means of coherently combining the polarization coherent state (PCS) of a linearly p-polarized bright 795 nm light beam and a linearly s-polarized squeezed vacuum state (SVS) generated by a 397.5 nm ultraviolet laser pumped sub-threshold optical parametric oscillator (OPO) with a PPKTP bulk crystal inside the OPO cavity. PSS with a squeezing level of −3.7 ± 0.3 dB has been achieved around the analysis frequency of 10 kHz. At different transitions of D1 line, various frequency detuning, and reasonable atomic vapor cell’s temperature, FR has been measured and compared. To decrease absorption (scattering) losses and the back-action from atomic spin noise to the probe beam’s polarization noise for maintaining the quantum properties of PSS of Stokes operator Ŝ2 of 795 nm light, we had to run our magnetometer with 87Rb vapor cell’s temperature below 60 °C, at which the PSS was almost destroyed. The sensitivities of magnetic field measurement were characterized via measuring signal-to-noise ratio of the alternating current calibrated magnetic field signal with a balanced polarimeter. Under the conditions of the atomic number density of ∼5.8 × 1010 cm−3 (T ∼ 40 °C) and the probe beam with a detuning of ∼−400 MHz relative to the 5S1/2 (Fg = 2) − 5P1/2 (Fe = 1) transition of 87Rb D1 line, a typical sensitivity of ∼19.5 pT (Hz1/2)−1 has been achieved employing PSS of Stokes operator Ŝ2 as the probe, compared with a sensitivity of ∼28.3pT (Hz1/2)−1 using PCS as the probe. We preliminarily demonstrated that the quantum-enhanced sensitivity in a Faraday-rotation-based 87Rb atomic magnetometer with the help of PSS of 795 nm light.