Distributed strain monitoring of geotechnical structures has gained increasing attention in the past decade. The distributed fiber optic strain sensing (DFOSS) technology enables the measurement of strain distribution in soil slopes. This paper aims to investigate the feasibility of strain based slope stability evaluation for locally loaded slopes. The measurements of horizontal strains at different elevations in a two-dimensional (2D) model slope subjected to a vertical surcharge load were analyzed. Empirical relationships between different types of strain parameters and factors of safety calculated by the conventional method were established. To verify the above findings, a 2D finite element model of a homogeneous soil slope was built. By applying a gradually increasing local load on the numerical model, the strains in the soil mass and eventually slope failure were induced. The strain distributions of several virtual monitoring lines under different loading levels were captured and analyzed in detail. At the same time, the strength reduction method (SRM) was used to perform slope stability analysis. The results show that the strain distribution characteristics are closely related to the propagation of plastic zones and the formation of the critical slip surface. Taking into consideration the convenience of field instrumentation and monitoring sensitivity, the maximum strains at different elevations can be used as characteristic parameters for estimating the slope stability condition. Compared with conventional displacement based slope stability evaluation method, the proposed methodology is more efficient and sensitive, which makes full use of the benefits of the DFOSS technology.