The invention provides a chitosan microsphere and a preparation method thereof and application thereof in reducing dielectric loss of vegetable oil, and belongs to the field of modified chitosan. Thepreparation method comprises the following steps: dissolving chitosan with the viscosity of 0.25-0.65 Pa.s in an acid, spraying the chitosan into a sodium polyphosphate solution for cross-link reaction under ultrasound treatment to obtain a preliminary crosslinked chitosan microsphere, washing the preliminary crosslinked chitosan microsphere with water, filtering and draining, adding the preliminary crosslinked chitosan microsphere into a sodium hydroxide solution, stirring, adding glutaraldehyde for reaction to obtain a secondarily crosslinked chitosan microsphere; washing the secondarily crosslinked chitosan microsphere with water, filtering, draining, in turn using 21-29%, 41-49%, 61-69% and 85-89% of an organic solvent for gradient dehydration elution, and freeze-drying. The preparation method of the chitosan microsphere can obtain the modified chitosan microsphere with a stable structure and a good adsorption performance. The application of the modified chitosan microsphere in reducing the dielectric loss of the vegetable oil is provided.