We study the concept of stabilization with internal loop for infinite‐dimensional discrete time‐varying systems in the framework of nest algebra. We originally give a parametrization of all stabilizing controllers with internal loop, and it covers the parametrization of canonical or dual canonical controllers with internal loop obtained before. We show that, in practical application, the controller with internal loop overcomes the awkwardness brought by the extra invertibility condition in the parametrization of the conventional controllers. We also prove that the strong stabilization problem can be completely solved in the closed‐loop system with internal loop. Thus the advantage of the controller with internal loop is addressed in the framework of nest algebra.