Hasbro Inc. said Wednesday that it will partner with Walt Disney Co.'s consumer products division to make Disney Princess and "Frozen" dolls in 2016—a potential blow to rival toy maker Mattel Inc., which currently sells dolls based on characters from the popular animated movie and Disney Princess stories.

Strong sales of the "Frozen" dolls have helped offset weak performance of Barbie dolls for Mattel in recent quarters. In July, Mattel Chief Executive Bryan Stockton said the company was working hard...