Desiccation cracks in compacted clay soils significantly impact their mechanical and hydraulic behavior, posing challenges for the stability and durability of geotechnical structures. While existing studies have extensively addressed crack formation, the self-healing behavior of desiccation cracks, particularly under repeated wetting–drying cycles, has received far less attention and remains remains largely unexplored in numerical modeling. To address this gap, we present a new computational framework that extends the Mesh Fragmentation Technique (MFT) to incorporate a coupled damage-healing constitutive model. A key innovation of the proposed approach is the independent treatment of stiffness and strength recovery, allowing partial or full healing, in contrast to conventional models that couple both through a single damage variable. The model also ensures energy consistency through the adjustment of fracture energy during healing. In parallel, a newly developed instrumented drying plate was used to investigate the evolution of shrinkage-induced cracking and healing in compacted clay under controlled laboratory conditions. The experimental results provide critical insights into crack morphology and healing behavior and are subsequently used to validate the numerical approach. The proposed framework enables the simulation of both crack propagation and healing within a unified, continuum-based formulation, providing a valuable tool for predicting the long-term performance of compacted clay barriers and soil layers subjected to drying in geotechnical applications.