The power oscillation damper (POD) in the doubly-fed induction generator (DFIG) is to damp the low- frequency oscillation (LFO) in the power systems. But the POD will introduce the LFO to the DFIG and intensify the oscillation of the latter. In this paper, open-loop subsystems of the DFIG with the POD and the rest part of power system are derived to describe the interaction between them. The balanced truncation method is used to reduce the transfer function of the DFIG and derive the analytical description to the oscillation of the DFIG. Considering the impact of the POD on the DFIG, the constraint to the DFIG is newly incorporated in the optimization model to the POD parameters, with the aim to alleviate the oscillation of both the DFIG and power system. The simulation verifies the accuracy of the reduced model of the DFIG, and validates the effectiveness of the improved optimization to the POD of the DFIG.