In order to effectively identify the loosened zone around underground openings by using continuum modeling, this paper proposes an index called elastic modulus deterioration index based on the following two steps. First, the response of surrounding rock mass in underground openings as obtained from ultrasonic tests before and after excavation is investigated. Based on the attenuation of the P-wave velocities of the rock mass after excavation compared to the P-wave velocities before excavation obtained from ultrasonic tests, an index (χ) is defined to assess the excavation-induced rock mass damage. Second, by introducing an empirical relationship between the static and dynamic elastic moduli, the index χ is modified to represent the static elastic modulus evolution, volume change, and stress redistribution of the rock mass based on an elasto-plastic numerical model. Furthermore, this study verifies the performance of the elastic modulus deterioration index to identify the loosened zone around underground openings by comparing its predictions with the results from ultrasonic testing of the loosened zones around two tunnels in the Jinping II hydropower station. The comparisons show that the loosened zones as identified by the elastic modulus deterioration index agree well to those from ultrasonic testing. Analysis of the effects of key input parameters and initial shear strength parameters on the elastic modulus deterioration index in identifying the loosened zone demonstrate that: (1) the sensitivity of the index to the key input parameters except the residual static elastic modulus is not significant; and (2) the index has better fault tolerance performance compared to the indices based on plastic zone in terms of the selection of initial shear strength parameters.