The railway track undergoes progressive deterioration over time because of cyclic loading imparted by passing trains. This leads to the development of various geometric defects, including settlement, misalignment, and twist, which collectively contribute to an undesirable running experience. Track deformations can arise from a multitude of factors, encompassing vehicle characteristics, track stiffness, substructure attributes (such as ballast, sleepers, and roadbed), and the dynamic forces arising from the interaction between the train and the track. In addition, ballast undergoes attrition and fouling with the accumulation of fine particles over time, owing to repeated loading and aging. Notably, alterations in water content induce significant modifications in the properties of the aged ballast. Consequently, the combination of the fine particle fraction and water content plays a pivotal role in the settlement behavior of the old ballasted track by weakening the ballast layer. This study primarily aims to predict the settlement behavior exhibited by aged ballast in a ballasted track during cyclic loading of the railway traffic. The train–track dynamic response simulations on a track containing ballast samples with different aging under various water contents were conducted using a two-dimensional (2D) train–track interaction model to predict the settlement of the ballasted track subjected to the repeated train loads by the University of Illinois at Urbana-Champaign (UIUC) model. It was observed that ballast aging negatively affects its settlement and that the presence of water, along with ballast aging, further seriously affects the track settlement.