Currently preschool education faces the challenges of mismatch between traditional teaching mode and modern technology development, and structural contradiction between children’s cognitive development needs and educational resource allocation. The wave of digitization has swept through the global education field, providing a new opportunity to solve the problem of preschool education quality improvement. In this study, the questionnaire survey method and experimental comparison method were used to analyze the effect of digital technology application on 268 preschool children. By constructing a digital technology system containing four dimensions of AR literacy, audio storytelling, doodling programming and number and shape playground, combined with three cognitive development indicators of operational IQ, linguistic IQ and total IQ, Pearson’s correlation analysis and hierarchical regression analysis were used for data processing. The results showed that there was a significant positive correlation between digital technology and children’s cognitive ability, and the goodness of fit of the hierarchical regression model R² reached 0.9673, and the significant P-value of each digital technology indicator was 0.000. Analysis of the five-year longitudinal data showed that the average student score decreased from 87.75 to 64.84 under the traditional mode of instruction, and the standard deviation increased from 6.79 to 17.48, reflecting a significant difference in the effectiveness of the instruction. The study shows that the introduction of digital technology can effectively improve the cognitive development of preschool children, providing empirical support for the construction of a modern preschool education system.