The observer-based feedback controller of a new linear networked control system (NCS) with both delays and packet dropouts is designed when the state information is not fully available. With the effects of transmission delays, NCSs are modeled as a discrete-time system with time-varying parameter. The occurrence of packet dropouts is modeled as a Bernoulli event in the NCSs. Under certain conditions, the observer-based controller is proved to render the corresponding NCSs exponentially mean-square stable based on Lyapunov stability theorem and matrix inequality theory. Finally, numerical simulations are included to demonstrate the theoretical results.