Electrical power system is one among the biggest and complex systems in the world. This system may always undergoes different types of disturbances that may cause to the loss of synchronism the system. To prevent this, Power system stabilizers (PSS) are being used in order to damp these oscillations and hence to maintain stability of the system. Leadlag compensation methods are used in the conventional type power system stabilizer (CPSS), where it have a fixed gain settings for particular operating condition. To cover the operating conditions of large range under different variables, fuzzy logic controllers are find to be the better one. In renewable energy sources (RES) the system inertia will be decreased due to the presence of power electronic inverters used to connect to the grid. This reduction in inertia will be improved by virtual inertia based control strategy. The design of virtual inertia based fuzzy controller power system stabilizer is been described in this paper. The main control objective of the intended work is to improve the stability and to increase the system dynamic response. The execution of the proposed controller shows enhanced results when analysed with the conventional type PSS. This work is done in SIMULINK atmosphere and the performance of the systems are investigated.