Recent PISA assessments revealed unsatisfactory cognitive abilities among Malaysian children. Poor cognitive development, stemming from inadequate preschool cognitive school readiness (SR), is an underlying factor. Well-designed preschool physical environments (PPE) could potentially enhance cognitive SR and subsequently improve childhood cognitive development. This study aims to highlight the importance of PPE design quality on children’s cognitive SR in Malaysia. A cohort study involving 336 children at 16 Ministry of Education (MOE) preschools was conducted. PPE design quality demonstrated a significant positive association with cognitive SR. Conclusively, better PPE design is hoped to improve cognitive development by ensuring cognitive SR among Malaysian preschoolers.