Derivatives of 3,9-dichloro-2,4,8,10-tetraoxa-3,9-diphosphaspiro-[5,5]undecane-3,9-dioxide (SPDPC) are of increasing interest as flame retardants for polymeric materials. In addition, SPDPC is also an important intermediate for the preparation of intumescent flame retardants (IFRs). However, low efficiency and undesirable dispersion are two major problems that seriously restrain the application of IFRs as appropriate flame retardants for polymer materials. Usually, the functionalization or modification of SPDPC is crucial to acquiring high-performance polymer composites. Here, a small molecule spirocyclic flame retardant diphenylimidazole spirocyclic pentaerythritol bisphosphonate (PIPC) was successfully prepared through the substitution reaction between previously synthesized intermediate SPDPC and 2-phenylimidazole (PIM). Phenyl group and imidazole group were uniformly anchored on the molecular structure of SPDPC. This kind of more uniform distribution of flame retardant groups within the epoxy matrix resulted in a synergistic flame retardant effect and enhanced the strength of char layers to the epoxy composites, when compared to the unmodified epoxy. The sample reached a limiting oxygen index (LOI) of 29.7% and passed with a V-0 rating in the UL 94 test with the incorporation of only 5 wt% of as-prepared flame retardant PIPC. Moreover, its peak of heat release rate (pHRR) and total heat release (THR) decreased by 41.15% and 21.64% in a cone calorimeter test, respectively. Furthermore, the addition of PIPC has only slightly impacted the mechanical properties of epoxy composites with a low loading.