A method of improving image reconstruction quality for time-domain breast diffuse optical tomography is proposed based on panel detection and finite-difference method. A multi-level scheme is presented that uses discrete wavelet transform to reach different resolution levels of wavelet domain decomposition and in some degree to reduce the number of unknown optical parameters at coarse resolution levels and alleviate the ill-posedness of inverse problem. Compared with the traditional full-spatial domain voxel based algorithm, this method can efficiently improve the reconstruction quality and spatial resolution. Numerical simulation results illustrate that the spatial edge-to-edge resolution of the reconstructed image is 4 mm and the quantitativeness is significantly improved.