The invention provides a loose soil modifier and a preparation method thereof. The loose soil modifier is prepared from the following raw materials in parts by weight: 15-20 parts of traditional Chinese medicine residues, 10-13 parts of turfy soil, 8-11 parts of bamboo charcoal, 5-8 parts of perlite, 3-5 parts of sawdust, 2-4 parts of microelements and 3-5 parts of fermentation liquid. The preparation method comprises the following procedures of (1) raw material pretreatment; (2) crushing; (3) mixing; (4) fermentation liquid preparation; (5) granulating; (6) fermenting and drying; and (7) sterilizing and packaging. According to the loose soil modifier, the ingredients are natural and available, the environmental structure of the soil can be deeply conditioned, the residues in the soil can be decomposed, the soil is effectively loosened, soil hardening is broken, deep ploughing is strengthened, the air permeability of the soil is strengthened, the water conservation and fertilizer storage capacity of the soil is improved, growth of plants is promoted, ecological balance of the soil is restored, and the loose soil modifier has the effects of water conservation, fertilizer increase and ventilation.