This paper investigates an improved inertia control strategy of variable speed wind turbines, which provides with a novel approach to dynamic characteristics enhancement during frequency and oscillation events. Based on the analysis of the impacts of frequency control on inter-area power oscillation, an improved frequency control scheme of wind turbines is proposed. In this scheme, a first-order lag differential control loop is added in traditional PD controller, so that the frequency regulation and power oscillation damping functions are combined in one unified controller to enhance the interconnected network stability, moreover it is easier for setting the parameters. A typical two-area system containing three synchronous generators and a DFIG based wind turbine with high wind penetration is tested to validate the proposed control strategies. Simulation results show that wind farms can provide rapid frequency response and positive oscillation damping using the proposed control strategy. Therefore, the dynamic stability of the grid with high wind power penetration can be significantly improved.