To improve the accuracy and resolution of small ptoelectronic encoders under the dual limitations of external dimensions and the number of code disc lines, a encoder subdivision method based on Coordinate Rotation Digital Computer (CORDIC) is proposed. Analyze the advantages and disadvantages of numerous electronic subdivision methods at present, analyze the causes of errors based on the subdivision principle, and use the improved CORDIC algorithm to perform high-precision subdivision processing on signals with less than one cycle of motion. The experimental results show that, compared with other methods, the maximum and minimum peak valley differences are reduced by 60″, 20″ and 10″ respectively, and the Root-mean-square deviation is reduced by 77.1%, 59.2% and 36.4% respectively, realizing the high-precision and miniaturization of displacement measurement.