The time-dependent behavior of power-law fluid has a significant influence on the grouting effects of reinforcing loose gravel soil. In this paper, based on basic rheological equations and the time-dependent behavior of rheological parameters (consistency coefficient and rheological index), rheological equations and penetration equations of time-dependent power-law fluid are proposed. Its penetration grouting diffusion mechanism for reinforcing loose gravel soil was then theoretically induced. A set of indoor experimental devices for simulating penetration grouting was designed to simulate the penetration grouting of power-law fluid with different time-dependent behaviors for reinforcing loose gravel soil. Then, relying on the COMSOL Multiphysics platform and Darcy’s law, three-dimensional numerical calculation programs for this mechanism were obtained using secondary-development programming technology. Thus, the numerical simulations of the penetration grouting process of power-law fluid with different time-dependent behaviors for reinforcing loose gravel soil were carried out. This theoretical mechanism was validated by comparing results from theoretical analyses, indoor experiments, and numerical simulations. Research results show that the three-dimensional numerical calculation programs can successfully simulate the penetration diffusion patterns of a time-dependent power-law fluid in loose gravel soil. The theoretical calculation values and numerical simulation values of the diffusion radius obtained from this mechanism are closer to indoor experimental values than those obtained from the penetration grouting diffusion theory of power-law fluid without considering time-dependent behavior. This mechanism can better reflect the penetration grouting diffusion laws of a power-law fluid in loose gravel soil than the theory, which can provide theoretical support and guidance for practical grouting construction.