The dynamic stability problem of Yunnan power grid after asynchronous networking is serious. Considering the characteristics of the numerous turbines in Yunnan Power Grid, PSS2B stabilizer is used for parameter optimization and setting in order to suppress the phenomenon of “reactive power reverse” while suppressing low frequency oscillation. For the shortcomings of slow convergence of grey wolf algorithm in the late stage, a dynamic weighting strategy is introduced to balance global search and local search capabilities and improve the accuracy of optimization. First, this paper uses SDM-Prony to perform electromechanical mode identification on the oscillation signal. Then it iteratively optimizes the optimal PSS parameters by improving the GWO algorithm. Finally, some power grids in the southeastern region of Yunnan Power Grid are built. Through the time-domain simulation checking in two ways, it is verified that the optimized parameters of PSS2B can effectively improve the damping of the system, and it has certain robustness and applicability. This work is supported by National Natural Science Foundation of China (No. 51477143) and China Southern Grid Project (No. K-YNKJXM-20160159).