The track is holding a public exhibition on Saturday to consult people who live or work in the local area ahead of submitting a planning application for the work, which would be paid for by building houses on some areas of the site.
Phil White, regional director, London region, Jockey Club Racecourses, said: "Sandown Park is one of Britain's favourite racecourses and the fastest to reach from London.
"We're really proud to be a significant visitor attraction, employer and business destination in Esher and for the Borough of Elmbridge, making an important social, economic and cultural contribution.
"However, much of Sandown Park's infrastructure is ageing so we're keen to undertake an investment and upgrade programme on the site over the next few years with benefits for the racing industry and our local community. The proposed plans have been designed to achieve this."
Proposed enhancements include work on the grandstand, with a 150-room hotel being built on the end furthest away from the winning post, improvements to the track and the stabling and staff accommodation. A new family zone with cafe, indoor and outdoor play facilities, and a children's cycle track in the centre of the course would be open to the public all year-round.
However, in order to fund the work, JCR want to create "five small, discrete pockets of residential development" around the edges of Sandown on previously developed land or adjacent to existing buildings.
Andrew Cooper, head of racing and clerk of the course at Sandown, said: "Sandown Park is one of the best viewing racecourses in the country because of its natural amphitheatre and we are very proud of the look and feel of the course.
"The proposals include improvements to benefit horses, racing staff, owners, trainers, jockeys and racegoers. They include track widening measures to increase the amount of racing surface, new stables, new stable staff accommodation on site and a new pre-parade ring and saddling boxes.
"As the only racecourse in the country to hold two Grade One, two-mile chases - the Betfair Tingle Creek Chase and bet365 Celebration Chase - support for these proposals would provide a big boost to the long-term success of Sandown Park for racing and the local community."
