Single photon detector (SPD) has a maximum count rate due to its dead time, which results in that the dynamic range of photon counting optical time-domain reflectometry (PC-OTDR) decreases with the length of monitored fiber. To further improve the dynamic range of PC-OTDR, we propose and demonstrate an externally time-gated scheme. The externally time-gated scheme is realized by using a high-speed optical switch, i.e. a Mach-Zehnder interferometer, to modulate the back-propagation optical signal, and to allow that only a certain segment of the fiber is monitored by the SPD. The feasibility of proposed scheme is first examined with theoretical analysis and simulation; then we experimentally demonstrate it with our experimental PC-OTDR testbed operating at 800 nm wavelength band. In our studies, a dynamic range of 30.0 dB is achieved in a 70 meters long PC-OTDR system with 50 ns external gates, corresponding to an improvement of 11.0 dB in dynamic range comparing with no gating operation. Furthermore, with the improved dynamic range, a successful identification of a 0.37 dB loss event is detected with 30-seconds accumulation, which could not be identified without gating operation. Our scheme paves an avenue for developing PC-OTDR systems with high dynamic range.