The invention discloses a soil improvement agent capable of preventing and controlling a soil-borne disease and a preparation method thereof. The soil improvement agent is prepared from the following raw materials in parts by weight: 20-25 parts of furnace dust, 8-10 parts of biogas residues, 4-6 parts of crop straw, 2-4 parts of waste gelatine powder, 2-3 parts of calcium magnesium phosphate fertilizers, 3-5 parts of bentonite, 1-2 parts of potassium fulvate, 4-6 parts of active yeast liquid, 1-2 parts of waste molasses, 4-6 parts of sheep and cow dung, 1-2 parts of alum powder, 2-4 parts of polyvinyl alcohol, 0.1-0.2 part of composite microbial agents, 1-2 parts of phosphogypsum, 2-3 parts of traditional Chinese medicine residues, 2-3 parts of gamma-polyglutamic acid and 3-4 parts of sterilizing agents, wherein the sterilizing agents are prepared from the following raw materials in parts by weight: 2-4 parts of camellia sinensis, 8-12 parts of tobacco stem powder, 8-10 parts of weathered coal, 2-3 parts of urea, 1-2 parts of garlic powder, 1-2 parts of tourmaline powder, 4-5 parts of hectorite powder and 2-3 parts of nanometer chitosan. The soil improvement agent disclosed by the invention can not only be used for effectively preventing and controlling the soil-borne disease and accelerating the healthy growth of a plant, but also be used for well regulating the soil compactness, reducing the soil bulk density, increasing the soil organic matter and enhancing the soil porosity, thereby being favorable to the maintenance of moisture and nutrient elements.