The magnetic flux leakage (MFL) signal is the leakage of magnetic field lines near the defect of the magnetized specimen, and its quality is critical to the nondestructive quantitative testing technology. The strategy of magnetic shielding (MS) technology is expected to enhance the MFL signal quality; however, the inconsistency between the existing experiments and simulation results limits the application of this technology. Here, we developed a finite element simulation method for the MS effect, which possesses the quantitative analysis ability to experimental results. Furthermore, the finite element simulations reveal the MS effect on MFL signals, and demonstrate the main influencing factors and the law that cause differences in the MS effect. The suitable size parameters of MS equipment and defect size of the tested specimen are the key factors affecting the MS effect. The theoretical analysis and conclusion in the paper can provide the reference for the MS equipment design in the MFL testing sensor.