Spin fluctuations are a crucial driving force for magnetic phase transitions, but their presence usually is indirectly deduced from macroscopic variables like volume, magnetization or electrical resistivity. Here we report on the direct observation of spin fluctuations in the paramagnetic regime of the magnetocaloric model system LaFe11.6Si1.4 in the form of neutron diffuse scattering. To confirm the magnetic origin of the diffuse scattering, we correlate the temperature dependence of the diffuse intensity with ac magnetic susceptibility and x-ray diffraction experiments under magnetic field. Strong spin fluctuations are already observable at 295 K and their presence alters the thermal contraction behavior of LaFe11.6Si1.4 down to the Curie temperature of the first-order magneto-structural transition at 190 K. We explain the influence of the spin fluctuation amplitude on the lattice parameter in the framework of the internal magnetic pressure model and find that the critical forced magnetostriction follows Takashi’s spin fluctuation theory for itinerant electron systems.