A new magnetic field measurement method based on Faraday effect and measurement of polarization-dependent loss (PDL) in fiber grating was proposed and analyzed in theory and experiment. When the external magnetic field is applied, the transmission constants of the two circularly polarized lights in fiber grating will be changed by the Faraday effect, and so does the PDL of fiber grating. The simulations show there is a linear relationship between the peak value of PDL and magnetic field in a certain range. Moreover, this method is insensitive to temperature. The influence of parameters of grating on measurement performance was analyzed. The measurement sensitivity is 7.8e-6 dB/Gs and the precision is 2 Gs using the optical vector analyzer with 10-5 dB precision in experiment, which agree well with the theoretical analysis.