Archibald Shaw, 81 of Ardrossan, carried out the sexual abuse in Kilmarnock and Newton Stewart between 1982 and 1990.
The High Court in Glasgow heard that he refuses to accept his guilt.
But judge Bill Dunlop QC told Shaw that the evidence against him was "overwhelming".
He said: "You carried out an appalling catalogue of perverted, predatory behaviour towards two children.
"You stole their childhood and affected the quality of their adult lives.
"I can never understand why, while you are violating children, you don't think these people will become adults and one day will bring you to account."
Judge Dunlop said that, but for Shaw's age, he would have imposed a longer sentence. Shaw was placed on the sex offenders' register for life.
His seven-year sentence will begin after he finishes a 21-month sentence for stalking a 15-year-old girl.
Solicitor advocate John Keenan, defending, told the court that Shaw had a heart condition and did not expect to be released from custody.
Shaw's victims, who are now in their 40s, went to the police after hearing on the radio that he had been convicted of stalking the schoolgirl.
Advocate depute Paul Brown, prosecuting, said: "The accused has previous convictions for sexual offences against children."
Shaw was found guilty of eight charges of sexual abuse, including rape.
Many of the offences took place in a caravan. Shaw would ply his young victims with alcohol and make them watch pornographic videos before abusing them.
He raped his 11-year-old victim again on various occasions when she was aged between 16 and 19.
Shaw claimed that he had had consensual sex with the girl once she turned 16, but the jury did not believe him.
In evidence, his victims said he ruined their childhoods.
One of them said: "He said if we ever told what had happened to us we would be taken away from our families."
The jail term was welcomed by NSPCC Scotland which praised Shaw's victims for coming forward to report his "heinous" crimes.
A spokesman for the charity said: "This sentence sends out the strong message once again that child abuse will not be tolerated, no matter when the offences took place, and we hope this case will encourage others to speak out about abuse they have suffered, knowing they will be listened to and supported."

The 41-year-old Finn was appointed this week, having played for the club between 1997 and 2000.
"We have the Latin guys who have strong blood and are passionate," said Caixinha from Portugal.
"Maybe we just needed to add someone from further north who can add a little bit of ice to calm down things from time to time."
Having been chosen ahead of other former Rangers players such as Barry Ferguson, John Brown, Kevin Thomson and Alex Rae, Johansson will join Caixinha's compatriots Helder Baptista, Pedro Malta and Jose Belman.
Caixinha told RangersTV: "We had a fantastic list of candidates and it really was really a pleasure.
"We tried to fill three major points and it wasn't an easy decision.
"First of all, we wanted someone with a Rangers past. The second point was of course to know the Scottish reality of football and the third, which was also important and which makes all the difference, is to align with our dynamic, our processes and our methodologies.
"We chose Jonatan and we believe in him. He will be a good assistant to add to our team because he's a quality guy, he is a hard worker and he is clever.
"I want all of the assistants to share with me the responsibility of what it means to be managing this club."
A pensioner has been jailed for seven years for raping an 11-year-old girl and attempting to rape a 10-year-old more than 30 years ago.
[NEXT_CONCEPT]
Rangers manager Pedro Caixinha believes Jonatan Johansson will bring a cool head to the Ibrox coaching staff.