Based on the mechanism of the IOFDR technique, this study proposed a low-cost, high-precision and distributed fibre quality detection method by taking Rayleigh backscattering light in the fibre as the signal light combined with its light wave conduction equation. Additionally, its numerical model is derived in detail. The system structure is designed. A high-precision online health monitoring system for optical fibre networks is developed, which realises the quality and health monitoring of optical fibre networks by frequent-spatial transformation. The experimental verification shows that the system can realise distributed detection of 10 km optical fibre with very low optical power (<10 mW). It can also guarantee the spatial resolution of 0.1 m with no difference along the optical fibre. The dynamic range is better than 34.5 dB, and the event blind area is very low; thus it accurately reflects the position and quality of fibre failure points or joints. In future studies, we will improve the range of frequency modulation and frequency modulation rate, focussing on the suppression and solution of nonlinear problems in frequency modulation. The spatial resolution and measurement distance index of IOFDR will be further improved, which is a low-cost and high-precision optical fibre sensing and detection technology with great development potential and promotion value.