Optical fiber measurement technology is widely used in the strength testing of buildings, the health testing of industrial equipment, and the minimally invasive surgery of modern medical treatment due to its characteristics of free calibration, high precision, and small size. This paper presents an algorithm that can improve the range and stability of strain measurements in order to solve the problems of the small range and measurement failure of optical fiber strain sensors based on optical frequency-domain reflectometry (OFDR). Firstly, a Rayleigh scattering model based on the refractive index perturbation of an optical fiber is proposed to study the characteristics of Rayleigh scattering and to guide the strain demodulation algorithm based on the spectral shift. Secondly, a local similar scanning method that can maintain a high similarity by monitoring local Rayleigh scattering signals (LSs) before and after strain is proposed. Thirdly, a generalized cross-correlation algorithm is proposed to detect spectral offset, solving the problem of demodulation failure in the case of a Rayleigh scattering signal with a low signal-to-noise ratio. Experiments show that the proposed method still has high stability when the spatial resolution is 3 mm. The measurement precision is 6.2 με, which proves that the multi-peaks or pseudo-peaks of the traditional algorithm in the case of a large strain, the high spatial resolution, and the poor signal-to-noise ratio are solved, and the stability of the strain measurement process is improved.