The optical frequency-domain reflectometry (OFDR) sensing system and signal processing method, which is based on the short-time Fourier transform, enable us to interrogate reflected wavelengths of fiber Bragg gratings (FBGs) and their relative position along the optical fiber with high spatial resolution. An FBG is an optical fiber with an appropriately inscribed periodic refractive index modulation. When a broadband optical signal is launched into the FBG, narrow wavelength bandwidth is reflected. Due to an attached transducer, such as Terfenol-D, the reflected wavelength changes with the applied magnetic field. The proposed magnetic FBG sensor consists of a small rod of magnetostrictive alloy TbDyFe, also known as Terfenol-D, which has large magnetostriction. The FBG is attached to the Terfenol-D rod with UV glue. Consequently, the external magnetic field is applied to the sensor and as a result, the Terfenol-D rod length increases. The reflected wavelength shift is observed and measured by the OFDR sensing system. Therefore, we determine the external magnetic field along the optical fiber from the reflected Bragg wavelength shift. The measurement results show that the proposed magnetic field sensors based on Terfenol-D using OFDR can be successfully used for measurement of the external magnetic field along an optical fiber.