An optimized design of laser range finding system using the self-mixing effect in a single-mode vertical-cavity surface-emitting laser (VCSEL) is proposed. In order to improve the ranging accuracy and expand dynamic measurement range, we apply difference frequency analog phase-locked loop (PLL) instead of fast Fourier transform (FFT) to process signal, and choose the optimum triangular wave frequency fm = 500 Hz and small modulation current 'Delta'I(p-p) = 0.28 mA to modulate single-mode VCSEL. The experiment results show that, without controlling the laser's temperature, the ranging accuracy is better than 2 mm and the measurement dynamic range is as large as 50-500 mm when the sampling time is 0.1 s and the room temperature is 0-55 Celsius degree.