The invention aims to provide a monitoring system and method for deep settlement of soil behind a shield tunnel wall. The monitoring system comprises a data collection device and a data processing system. The data collection device comprises an anchor head, an LCI displacement meter, a PVC pipe, a first optical fiber cable, a filter screen, a lantern ring, a first micro grouting pipe and a secondmicro grouting pipe, wherein the LCI displacement meter is arranged in the PVC pipe, the upper end of the LCI displacement meter is rigidly connected with the anchor head, the lower end of the LCI displacement meter is connected with the data processing system through the first optical fiber cable, the anchor head extends into the PVC pipe and is inserted into in-situ soil, the lantern ring sleeves the PVC pipe, the filter screen is embedded in the middle, and the first micro grouting pipe and the second micro grouting pipe are bound in the PVC pipe. According to the scheme, the problem that drilling measurement cannot be conducted under the existing shield tunnel segment sealing condition is solved; meanwhile, the optical fiber sensing technology has the advantages of being high in precision, high in electromagnetic interference resistance and suitable for long-term monitoring of tunnels, the requirement for automatic monitoring can be completely met, and the optical fiber sensing technology can be applied to actual engineering conditions.