The invention relates to silicon rubber with high refractive index and high transparency for optical encapsulation and a preparation method thereof. The silicon rubber is prepared from a phenyl vinyl polysiloxane component A, a silicon resin component B containing phenyl vinyl, a phenyl component C containing hydrogen polyoxyalkylene, a platinum catalyst component D, a catalytic inhibitor component E, a modified polysiloxane component F, and a water remover component G in a mixing manner. The silicon rubber not only has over 1.50 of refractive index, but also is good in transparency, excellent in adhesion, and stable in performance, can resist heat and ultraviolet radiation for a long period of time, can meet various requirements of LED (light-emitting diode) encapsulation, and is an ideal encapsulation material of the LED. The silicon rubber can be packaged into a bi-component product; the product has good storage stability; and high transparency is still kept after the product is stored for over 6 months.