A new sensor configuration is proposed for simultaneous strain and temperature monitoring in a composite material that is based on a chirped fiber Bragg grating (CFBG) written in a highly birefringent (HB) polarization-maintaining fiber. The sensor is designed in the reflective configuration in which the CFBG acts both as a reflector and a sensing element. Since CFBG and HB fiber induce changes in the state of polarization (SOP), interference between polarization modes in the reflected spectrum is observed and analyzed. We used a simple readout setup to enable fast, linear operation of strain sensing as well simultaneous strain and temperature measurements in the composite.