Project Gutenberg "Aesop's Fables"
The quote is the first line of an introduction by G.K. Chesterton to a translation of Aesop's fables by V.S. Vernon Jones.
The author of the introduction says that Aesop deserves the epigram "his fame is all the more deserved because he never deserved it." The sense of "epigram" is a "paradoxical statement". It is a statement that is contradictory on the surface, but has an underlying truth.
The author goes on to explain in the rest of his introduction that the fables are from anonymous sources, so Aesop himself did not write them. In that sense, they are not his fables. The author also explains that Aesop still deserves fame for having collected the fables and preserved them.
The phrase "all the more" is an idiom. In this sentence it means the fame is deserved even more because it is not deserved.
The phrase is explained here:
Wiktionary "all the more"
"Even more; notably, but even more notably due to additional information, either preceding or following the statement.
Lytle’s progress as a boxer is all the more remarkable when taking into account his unique circumstances.
Cambridge Dictionary "all the more"
even more than before:
Several publishers rejected her book, but that just made her all the more determined.