The invention discloses a novel magnetostrictive material designed according to a FeGa-RFe2 magnetocrystalline anisotropy compensation principle and a preparation method thereof. The composition of the magnetostrictive material is (Fe100-XGaX)Y(RFe2)Z, wherein X is more than or equal to 10 and less than or equal to 40, the compensation compositions ratio of Y:Z in a Y-Z regulating pseudo-binary system is 1-20, RFe2 is one or more than one of TbFe2, SmFe2, DyFe2, HoFe2, ErFe2 and TmFe2, and X, Y, and Z are mole percentage contents. In the novel magnetostrictive material designed according to a FeGa-RFe2 magnetocrystalline anisotropy compensation principle, since a trace of rare-earth RFe2 component with large magneto-strain property is added into non-rare-earth FeGa based magnetostrictive alloy compositions, and magnetocrystalline anisotropy compensation is carried out on FeGa compositions, thus obtaining the novel magnetostrictive material with advantageous properties such as large magneto-strain, low drive field, high mechanical property, low cost, and the like.