Power and energy ratings are the most important parameters of Flywheel Energy Storage System (FESS) which have a crucial influence on its dynamic performance in frequency regulation applications. In order to achieve the optimum dynamic performance of FESS, an integrated model is required which includes key parameters of the power network and FESS. In this paper, an integrated transfer function of FESS connected to a single-bus aggregated power system is presented. The proposed model includes both power network and FESS parameters. Moreover, the model is linearized to facilitate the application of the parameter screening approach which recognizes the most influential parameters through Taguchi method. Afterwards, combined Response Surface Methodology (RSM)-GA optimization algorithm is utilized based on an accurate approximation of the system transfer function. In order to obtain FESS power and energy ratings on the basis of lowest capital price and best dynamic response objective functions, optimization algorithm is used. The simulation and experimental studies confirm the validity of the proposed modelling and optimization approach.