An intelligent switching system for switching internal cooling and external cooling and a method are provided. The system includes a vision system, a cooling system and a control system. The vision system monitors a real-time milling state of a cutter, collects a real-time milling depth image that the cutter mills a workpiece, and transmits the collected real-time milling depth image to the control system. The control system includes a lubrication mode control center, and a motor control center. The lubrication mode control center receives the real-time image transmitted by the image collection control center; analyzes and processes the real-time image to obtain real-time milling depth data of the cutter. The motor control center receives a signal sent by the lubrication mode control center; analyzes and processes the signal, and transmits a control instruction to the cooling system. The cooling system executes a switching command issued by the control system.