The adoption of charge-redistribution-technique-based successive approximation register (SAR) architecture in capacitance domain has improved the performance of the digital readout circuit used for capacitive sensor applications. The direct conversion of an off-chip sensor's capacitance to a digital value requires a large implemented capacitor array. A scale factor scaling the reference voltage is used to reduce the overall value of the capacitor array, though at the price of increasing power consumption due to a multi-level voltage divider is required. Moreover, the scale factor is adjusted manually which is not acceptable in practice. To overcome this problem, we propose an innovative algorithm which adapts automatically and exactly the off-chip capacitance to the implemented capacitance without using the multi-level voltage divider. The proposed algorithm is operated fully in digital domain which is straightforward for implementation. The effectiveness of the automatic dynamic range adaptation scheme is demonstrated via behavioral-level simulations of a differential capacitance/digital converter.