The development of high-performance insulation materials that facilitate the reduction in building energy consumption is of paramount significance. In this study, magnesium–aluminum-layered hydroxide (LDH) was prepared by the classical hydrothermal reaction. By implementing methyl trimethoxy siloxane (MTS), two different MTS-functionalized LDHs were prepared via a one-step in situ hydrothermal synthesis method and a two-step method. Furthermore, using techniques, such as X-ray diffraction, infrared spectroscopy, particle size analysis, and scanning electron microscopy, we evaluated and analyzed the composition, structure, and morphology of the various LDH samples. These LDHs were then employed as inorganic fillers in waterborne coatings, and their thermal-insulation capabilities were tested and compared. It was found that MTS-modified LDH via a one-step in situ hydrothermal synthesis method (M-LDH-2) exhibited the best thermal insulating properties by displaying a thermal-insulation-temperature difference (ΔT) of 25 °C compared with the blank panel. In contrast, the panels coated with unmodified LDH and the MTS-modified LDH via the two-step method exhibited thermal-insulation-temperature difference values of 13.5 °C and 9.5 °C, respectively. Our investigation involved a comprehensive characterization of LDH materials and coating films, unveiling the underlying mechanism of thermal insulation and establishing the correlation between LDH structure and the corresponding insulation performance of the coating. Our findings reveal that the particle size and distribution of LDHs are critical factors in dictating their thermal-insulation capabilities in the coatings. Specifically, we observed that the MTS-modified LDH, prepared via a one-step in situ hydrothermal approach, possessed a larger particle size and wider particle size distribution, resulting in superior thermal-insulation effectiveness. In contrast, the MTS-modified LDH via the two-step method exhibited a smaller particle size and narrow particle size distribution, causing a moderate thermal-insulation effect. This study has significant implications for opening up the potential for LDH-based thermal-insulation coatings. We believe the findings can promote the development of new products and help upgrade industries, while contributing to local economic growth.