Recently, layered rare-earth hydroxides (LRHs) have received growing attention in the field of theranostics. We have previously reported the hydrothermal synthesis of layered terbium hydroxide (LTbH), which exhibited high biocompatibility, reversible uptake of a range of model drugs, and release-sensitive phosphorescence. Despite these favourable properties, LTbH particles produced by the reported method suffered from poor size-uniformity (670 ± 564 nm), and are thus not suitable for therapeutic applications. To ameliorate this issue, we first derive an optimised hydrothermal synthesis method to generate LTbH particles with a high degree of homogeneity and reproducibility, within a size range appropriate for in vivo applications (152 ± 59 nm, n = 6). Subsequently, we apply this optimised method to synthesise a selected range of LRH materials (R = Pr, Nd, Gd, Dy, Er, Yb), four of which produced particles with an average size under 200 nm (Pr, Nd, Gd, and Dy) without the need for further optimisation. Finally, we incorporate Gd and Tb into LRHs in varying molar ratios (1 : 3, 1 : 1, and 3 : 1) and assess the combined magnetic relaxivity and phosphorescence properties of the resultant LRH materials. The lead formulation, LGd1.41Tb0.59H, was demonstrated to significantly shorten the T2 relaxation time of water (r2 = 52.06 mM-1 s-1), in addition to exhibiting a strong phosphorescence signal (over twice that of the other LRH formulations, including previously reported LTbH), therefore holding great promise as a potential multi-modal medical imaging probe.