The invention discloses a traditional Chinese medicine preparation for treating cirrhosis and a preparation method thereof. The traditional Chinese medicine preparation is prepared from, by weight, 3-5 parts of hirudo, 1-3 parts of Rhizoma curcumae, 10-20 parts of Pu-er raw tea, 5-10 parts of Radix morindae officinalis, 0.2-0.8 part of pig lung extract, 5-20 parts of kelp, 5-15 parts of root of Litsea glutinosa and 10-25 parts of fried hedgehog hide, wherein active ingredients of pig lung extract are one or multiple of phosphatidylcholine, dipalmitoyl phosphatidylcholine, phosphatidyl ethanolamine, phosphatidylserine, phosphatidyl-inositol and sphingomyelin. The preparation method includes: subjecting raw materials to smashing, water extracting or supercritical CO2 extracting and mixing. A principle of regulating kidney, gallbladder and spleen at the same time is adopted, the traditional Chinese medicine preparation has efficacy of clearing heat for detoxification, soothing liver for choleresis, promoting diuresis to treat stranguria, calming liver to regulate qi, activating blood to remove stasis, strengthening heart to lower blood pressure, dispelling wind to stop pain and regulating immunity, is safe, reliable, free of toxic and side effect, short in treatment course, quick in action, low in cost, capable of treating both symptoms and root causes and worthy of wide popularization and application clinically.