The invention discloses an external water circulation system having an automatic control function and used for a TBM and an external water circulation method. The external water circulation system andthe external water circulation method solve the problems that in the prior art, internal water temperature is difficult to control, the external water pressure drop is large, and water return is difficult. The external water circulation system comprises a cooler, and an external circulating water inlet system and an external circulating water outlet system are connected to the cooler, and the cooler is connected with an internal circulating water inlet pipe and an internal circulating water outlet pipe. The external water circulation system and the external water circulation method can be used for external water circulation under different working conditions such as short-distance tunnels and long-distance tunnels. When the tunnel distance is short, water return is directly carried out through a water outlet main pipe; when the tunnel distance is long, a warm water tank is used for buffering outlet water, and the problems that under the long-distance tunnel working condition, the external water pressure drop is large and water return is difficult are solved. A first manual gate valve is used for adjusting the flow rate of the external water passing through the cooler, the internalwater temperature is further controlled, the system and method are convenient and easy to control, and the problem that the internal water temperature is difficult to control is effectively solved.