Time-reversed ultrasonically-encoded (TRUE) optical focusing is a promising technique to realize deep-tissue optical focusing by employing ultrasonic guide stars. However, the sizes of the ultrasound-induced optical focus are determined by the wavelengths of the ultrasound, which are typically tens of microns. To satisfy the need for high-resolution imaging and manipulation, iterative TRUE (iTRUE) was proposed to break this limit by triggering repeated interactions between light and ultrasound and compressing the optical focus. However, even for the best result reported to date, the resolutions along the ultrasound axial and lateral direction were merely improved by only 2-fold to 3-fold. This observation leads to doubt whether iTRUE can be effective in reducing the size of the optical focus. In this work, we address this issue by developing a physical model to investigate iTRUE in a reflection mode numerically. Our numerical results show that, under the influence of shot noises, iTRUE can reduce the optical focus to a single speckle within a finite number of iterations. This model also allows numerical investigations of iTRUE in detail. Quantitatively, based on the parameters set, we show that the optical focus can be reduced to a size of 1.6 µm and a peak-to-background ratio over 104 can be realized. It is also shown that iTRUE cannot significantly advance the focusing depth. We anticipate that this work can serve as useful guidance for optimizing iTRUE system for future biomedical applications, including deep-tissue optical imaging, laser surgery, and optogenetics.