Cerebral small vessel disease, an important risk factor for dementia, lacks robust, in vivo measurement methods. Perivascular spaces (PVS) on brain MRI are surrogates for small parenchymal blood vessels and their perivascular compartment, and may relate to brain health. We developed a novel, robust algorithm to automatically assess PVS count and size on MRI, and investigated their relationship with dementia risk and brain atrophy. We analyzed 46,478 clinical measurements of cognitive functioning and 20,845 brain MRI scans from 10,004 participants (71.1±9.7 years-old, 56.6% women). Fewer PVS and larger PVS diameter at baseline were associated with higher dementia risk and accelerated brain atrophy. Longitudinal trajectories of PVS markers were significantly different in non-demented individuals who converted to dementia compared with non-converters. In simulated placebo-controlled trials for treatments targeting cognitive decline, screening out participants less likely to develop dementia based on our PVS markers enhanced the power of the trial. These novel radiographic cerebrovascular markers may improve risk-stratification of individuals, potentially reducing cost and increasing throughput of clinical trials to combat dementia.