A magnetic field sensing system based on a phase-shift fiber loop ring-down (FLRD) technique and multi-mode interferometer (MI) coated with magnetic fluid (MF) is proposed and demonstrated. The MI is constructed by splicing a segment of no-core fiber between two sections of single-mode fibers, which is then immersed in MF to serve as a sensing head with the advantages of simple fabrication and specific magnetic sensitivity. Due to the magnetic refractive index tunable properties of the MF, the magnetic-field-dependent loss will be introduced in the fiber loop by the sensing head. Such magnetic-induced loss would be accumulated during the round trip of the optical carrier and reflected on the phase information of the modulated signal. The phase-shift changes with the applied magnetic field strength, enabling magnetic field sensing through phase-shift measurements. The sensing system is experimentally demonstrated and a sensitivity of 0.704×10−3deg/Gs in the linear region is achieved. Moreover, the stability and repeatability of the system are verified, leading to a promising method for magnetic field measurements.