The invention relates to the field of preparation of dielectric materials and particularly relates to high-tetragonal barium titanate doped with rare earth neodymium and a preparation method thereof. The preparation method includes the steps of: a) respectively preparing a barium acetate solution, a rare earth neodymium salt solution, and a titanium alkoxide solution, and stirring the titanium alkoxide solution for 10-20 min and adding triethanolamine to prepare a first solution; b) adding glacial acetic acid, intensively stirring the solution to prepare a second solution; c) successively adding the barium acetate solution and the rare earth neodymium salt solution to the second solution, and intensively stirring the mixture to prepare a sol solution; d) heating the sol solution in a water bath pot at 50-60 DEG C for 30 min to prepare wet gel; e) drying the wet gel in a vacuum-drying box at 100-120 DEG C for 6-7 h to prepare dry gel; and f) thermal-treating the dry gel, wherein the temperature is increased to 1200-1300 DEG C at the rate of 5-7 DEG C/min and then is maintained, and finally cooling the treated gel to room temperature in a furnace. The method solves the problems of particle aggregation, low content of the tetragonal phase and low dielectric constant of the barium titanate product in the prior art.