It shouldn't be in soil. I guess it could be in a peat mix but that isn't good either. I would get a bark mix and mix in some sphagnum moss or use straight moss. It depends on your watering habits. If you tend to over water than I wouldn't suggest straight sphag moss. You can also use a bark mix but it won't hold as much moisture. It all depends on what you are used to. If your plant really is in soil I don't know how it is still alive. Phalaenopsis live as epiphytes in the wild so their roots are exposed to air all the time. They don't grow in soil. Phals usually come in bark or moss. Are you sure it is soil? Or is it bark that is really decomposed? If you use sphagnum moss don't pack it too tight. I use the sphag moss but I either use unglazed clay pots since they breath or I use clear slotted plastic pots. For my Phals I use the clear slotted plastic pots and sphag moss. Do not use Miricle Grow Orchid mix! It is only peat moss and perlite so it is too much like potting soil which will rot your roots. If you use a bark mix you need to soak it for at least 24 hours. New bark doesn't hold water like older bark does so you will find you might need to water more.
As far as the pot size you should put it in a pot that just fits the healthy roots snugly. If you end up finding that the plant has a lot of dead roots when you unpot it you might need to go down in pot size. You do not want to over pot. You don't need to pot a size bigger for Phals. Match the pot to the roots not the top growth. If it is top heavy you can put the pot it is in into another heavier pot but leave some air spaces between the pots. Many people here like to use clear plastic pots so you can see what the roots are doing. Phal roots will also photosynthesize if they are exposed to light.
When you repot cut off any squishy hollow roots. If they are firm they are healthy. You could find some roots that are firm on part of the root but are squishy and rotted on the other part. You can cut off the dead rotted part and seal the cut edge with cinnamon powder. But make sure you don't get the cinnamon powder on the roots more than that because it will dry them up. There is a great thread called the Phal abuse ends here. It is really long but I recommend reading it. It has a lot of info on Phals. Here is the link.
http://www.orchidboard.com/community...ends-here.htmlIf you have anymore questions let us know.