The invention discloses a level test system and method based on OFDR optical fiber sensing. The level test system comprises a level test component, a heating sensor optical cable, an inclinometer dataacquisition instrument, a photoelectric conversion module, a DTS demodulator, and an OFDR optical fiber data acquisition instrument, an optical fiber data processing and analysis system and a monitoring result display and early warning system. During the test, an inclinometer equipped with a distributed optical fiber strain sensor, a temperature compensation optical fiber and an acceleration sensitive element is connected in series through an optical cable, the heating sensor optical cable is laid on an inclinometer tube, and the inclinometer is lowered along the inclinometer tube, to obtainthe horizontal displacement, strain and seepage field change information of a monitoring point; and after the test data is processed and analyzed by a data processing system, showing that the horizontal displacement of a soil body changes with the depth and the seepage flow graphically. A method of combining optical fiber sensing and traditional inclination measurement is adopted to monitor the horizontal displacement of the soil body. The monitoring method is comprehensive and high in accuracy, and can fully understand the trend of the horizontal displacement of the soil body, and judge the early warning sliding surface in advance.