In light of the ongoing advancements in achieving carbon neutrality, the gradual phase‐out of power generation utilizing synchronous generators possessing physical inertia from the grid is anticipated. Consequently, the power system will exhibit reduced inertia. To effectively comprehend and address this associated risk, a precise evaluation technique for power system inertia becomes imperative. In this paper, the accuracy of online real‐time estimation of inertia and damping based on transient response is improved by polynomial approximation considering the effect brought by the control system represented by the governor. The order of polynomials that are expected to be the optimal choice is also pointed out. The related content is verified in a system using the IEEE NE 10 machine test system. © 2025 Institute of Electrical Engineers of Japan and Wiley Periodicals LLC.