The bacteria that colonize plant roots and enhance plant growth by various mechanisms are known as plant growth-promoting rhizobacteria (PGPR). The functions of rhizobacteria stand substantially unexplored and detailed insights into the aerobic rice ecosystem are yet to be examined. In this study, we have isolated rhizobacteria from rice varieties grown under aerobic conditions. Seed germination test showed that strain Ekn 03 was significantly effective in stimulating germination, enhancing shoot and root length, and increasing dry matter accumulation in treated rice plants as compared to the uninoculated plants. Under greenhouse conditions, strain Ekn 03 treated rice varieties showed an overall increase in plant height by 7.63%, dry matter accumulation by 16.23%, and total chlorophyll content by 76.47%. Soil acetylene reduction assay (ARA) (4.17 nmole ethylene/g soil/h) and in-planta ARA (4.2 × 10−2 nmole ethylene/mg fresh weight of plant/h) was significantly higher in Ekn 03 treated rice variety PB 1509 under aerobic conditions. Other rice varieties showed comparable performance on inoculation with strain Ekn 03. The endophytic and rhizospheric population of antibiotic tagged Ekn 03 was higher in the roots of PB 1509 (1.02 × 104 cfu/g and 5.8 × 105 cfu/g soil, respectively) compared to other rice varieties. 16S rDNA sequence analysis revealed that strain Ekn 03 was having 100% similarity with Pseudomonas protegens. This study suggests that strain Ekn 03 can be used as a microbial inoculant in rice plants under aerobic system of cultivation. This is the first report on the application of P. protegens as PGPR in rice.