Diabetes is a widespread chronic disease that occurs mainly in the elderly population. Due to the difference in pathophysiology between elderly and young patients, the current clinical practice to treat elderly patients with anti-diabetes medications still faces some challenges and dilemmas, such as the urgent need for early diagnosis and prevention, and an imbalance between restricted dietary intake and the risk of undernutrition. Traditional Chinese medicine (TCM) offers various treatment regimens that are actively utilized in the field of diabetes management. Through multiple targets and multiple pathways, TCM formulas, medicinal herbs, and active natural products enhance the efficacy of diabetes prevention and diabetes control measures, simplify complex medication management, and improve common symptoms and common diabetic complications in elderly people. Historically, natural products have played a key role in material composition analysis of TCM and mechanism interpretation to enable drug discovery. However, there have been few conclusions on this topic. This review summarizes the development of TCM for the prevention and management of diabetes in elderly people, existing evidence-based clinical practices, and prospects for future development.