In order to reflect the characteristics of foundation settlement after dynamic compaction, the relationship between the contact force and foundation settlement is established based on the principle of work and power. According to the principle of static equivalence and the calculation principle of layered settlement of foundation, the formula of contact force and settlement of dynamic compaction is deduced. The formula is simple and can calculate the settlement of layered soil after compaction. The calculation results show that the calculated value of foundation settlement is close to the field measured one, indicating a good verification for the applicability of the proposed formula. The calculated value of settlement and deformation modulus of each layered soil foundation after compaction is in accordance with the engineering practice, which reflects the strengthening characteristics of the dynamic compaction method.