The present disclosure provides a cadmium telluride solar cell and a preparation method thereof. The method includes: providing a substrate, and forming a window layer on a first surface of the substrate, wherein the window layer is made of magnesium-doped zinc oxide; forming a light absorbing layer on a surface of the window layer, wherein the light absorbing layer includes a composite layer of cadmium selenide, selenium-doped cadmium telluride, and cadmium telluride; and forming a back electrode layer on a surface of the light absorbing layer. The use of the composite structure of cadmium selenide, selenium-doped cadmium telluride, and cadmium telluride allows the solar cell to absorb long-wavelength and short-wavelength light to the maximum, increases the short-circuit current density of the cell, and improves the efficiency of the cell. In addition, the window layer including magnesium-doped zinc oxide of the solar cell serves as a buffer layer to reduce the recombination of charge carriers between interfaces. Finally, the composite layer of cadmium selenide, selenium-doped cadmium telluride, and cadmium telluride that has a selenium-doped gradient can effectively prevent the diffusion of copper ions to the window layer of magnesium-doped zinc oxide, and reduce the formation of deep-level defects, thereby improving the initial performance and long-term stability of the solar cell.