The granular material pile has its own deformation characteristics under vertical loads. The granular material pile shows not only a vertical compressive deformation but also a radial expansion near the top of the pile. According to the study of this load transfer mechanism, a new equation was developed to calculate the compressive deformation of a single granular material pile. On the basis of this investigation way, a new method to predict the settlement of the composite foundation reinforced by granular material piles such as stone columns was developed. In the analysis model, the granular pile was treated as an elastic material satisfying Hooke's law, and the lateral confining support provided by the surrounding soil was assumed as lateral soil pressure. Further, the beneficial influence of the lateral restraint of the reinforced cushion as well as its development within depth on restricting the lateral bulging of the granular pile was taken into account. Finally, a case study was performed to validate the proposed method. The foundation settlements predicted by the proposed model were close to those of existing calculation methods. The prediction results indicate that the proposed method based on the load transfer mechanism is more practical because the proposed method can consider the variation law that the depth of lateral deformation of the pile increases with the increase of the vertical load acting on the top of the pile.