To address the challenge of balancing thermal management and thermal runaway mitigation, it is crucial to explore effective methods for enhancing the safety of lithiumion battery systems. Herein, an innovative hydrated salt composite phase change material (HSCPCM) with dual phase transition temperature zones has been proposed. This HSCPCM, denoted as SDMA10, combines hydrophilic modified expanded graphite, an acrylic emulsion coating, and eutectic hydrated salts to achieve leakage prevention, enhanced thermal stability, cycling stability, and superior phase change behavior. Battery modules incorporating SDMA10 demonstrate significant thermal control capabilities. Specifically, the cylindrical battery modules with SDMA10 can maintain maximum operating temperatures below 55 °C at 4 C discharge rate, while prismatic battery modules can keep maximum operating temperatures below 65 °C at 2 C discharge rate. In extreme battery overheating conditions simulated using heating plates, SDMA10 effectively suppresses thermal propagation. Even when the central heating plate reaches 300 °C, the maximum temperature at the module edge heating plates remains below 85 °C. Further, compared to organic composite phase change materials (CPCMs), the battery module with SDMA10 can further reduce the peak thermal runaway temperature by 93 °C and delay the thermal runaway trigger time by 689 s, thereby significantly decreasing heat diffusion. Therefore, the designed HSCPCM integrates excellent latent heat storage and thermochemical storage capabilities, providing high thermal energy storage density within the thermal management and thermal runaway threshold temperature range. This research will offer a promising pathway for improving the thermal safety performance of battery packs in electric vehicle and other energy storage systems.