In inverse finite element-based analysis, complete experimental data collection is critical for multi-parameter identification and physical modeling of all kinds of materials. In this paper, diffraction-assisted image correlation (DAIC) is improved and proposed for the deformation measurement of a soft material under indentation with no blind area. A simple and convenient image-based 3D calibration method was developed, and more accurate formulations for 3D displacement measurement based on a more rigorous imaging model were derived. Using the improved DAIC, a newly developed imaging device with indenter-fixed loading and no blind area is proposed that allows 3D displacements of the whole upper surface of a soft silica gel specimen to be retrieved. The experimental results demonstrate that the proposed method is an accurate, efficient and convenient tool with a simple structure for 3D indentation deformation measurement and illustrate its capabilities to capture deformation in indentation tests with tough testing requirements, such as in situ measurement with limited access (high integration level) and dynamic testing (capturing of synchronously stereo images).