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Preference-based reinforcement learning (RL) algorithms help avoid the pitfalls of hand-crafted reward functions by distilling them from human preference feedback, but they remain impractical due to the burdensome number of labels required from the human, even for relatively simple tasks. In this work, we demonstrate that encoding environment dynamics in the reward function (REED) dramatically reduces the number of preference labels required in state-of-the-art preference-based RL frameworks. We hypothesize that REED-based methods better partition the state-action space and facilitate generalization to state-action pairs not included in the preference dataset. REED iterates between encoding environment dynamics in a state-action representation via a self-supervised temporal consistency task, and bootstrapping the preference-based reward function from the state-action representation. Whereas prior approaches train only on the preference-labelled trajectory pairs, REED exposes the state-action representation to all transitions experienced during policy training. We explore the benefits of REED within the PrefPPO [1] and PEBBLE [2] preference learning frameworks and demonstrate improvements across experimental conditions to both the speed of policy learning and the final policy performance. For example, on quadruped-walk and walker-walk with 50 preference labels, REED-based reward functions recover 83% and 66% of ground truth reward policy performance and without REED only 38\% and 21\% are recovered. For some domains, REED-based reward functions result in policies that outperform policies trained on the ground truth reward.