In this study, the flattening of Fe-6.5 wt%Si powders was achieved through ball milling. The effects of different ball milling durations on the aspect ratio of Fe-Si powders, as well as the corresponding structure and magnetic properties of the Fe-Si SMPC, were systematically investigated. The ball milling treatment significantly altered the structure of the Fe-Si powders, leading to a reduction in both the eddy current diameter and the in-plane demagnetization factor. The layered structure formed by the flaky Fe-Si powders demonstrated a remarkable effect in suppressing the eddy current and demagnetization effects. However, excessive ball milling time compromised the structural integrity of the flaky Fe-Si powders, resulting in a degradation of their magnetic properties. The layered Fe-Si SMPC prepared from flaky Fe-Si powders obtained after 24 h of ball milling exhibited excellent magnetic properties, including low magnetic loss (76.12 W/kg at 50 kHz/0.05 T) and significantly enhanced effective permeability (185).