In this work, we give, for the first time to our knowledge, a theoretical model of chaotic delta correlation for detecting Fresnel reflections. Based on this model, a novel optical fiber sensor for remote liquid level sensing is proposed and demonstrated. By using a 13.5 mW chaotic laser with 9 GHz bandwidth and a simply designed sensing unit, proof-of-concept experiments show this type of sensor can conduct remote liquid level sensing with a sensing distance as long as 40 km and a measurement accuracy of around 10 mm. Its theoretical maximum accuracy can be adjusted by changing the bandwidth of the chaotic laser, which can conveniently be achieved by adjusting the power of the feedback beam injected into distributed feedback semiconductor laser diode (DFB-LD). This type of liquid level sensor may have applications involving remote liquid level sensing, e.g., warning of the flood, monitoring of oil storage in tanks, sensing of dangerous chemical liquids, monitoring water-level in nuclear power stations, etc.