As a clean and low-carbon energy source, natural gas is an important force in achieving carbon peaking and carbon neutrality goals. Affected by the strong force of gas and liquid during mining and transportation, it exhibits the phenomenon of droplet entrainment. Entrained droplets change the properties of gas and liquid phases, which is crucial for accurate measurement of liquid film thickness, gas holdup, pressure drop and flow rates in natural gas pipelines. The measurement of entrained droplets has always been a focus and difficulty in the two-phase flow research field. Therefore, numerical simulation combined with experimental measurement are presented to study the droplet entrainment mechanism and closed equations of two-fluid model. The specific parameter settings for simulating horizontal gas–liquid annular flow based on numerical method are discussed, and effective simulation of droplet entrainment and deposition in annular flow is achieved. By comparing liquid film thickness and wave velocity from the simulation results with the experimental results, the correctness of the simulation method is verified. Then, the mechanism and dynamic evolution process of entrained droplets in annular flow are revealed, and the generation and deposition characteristics of entrained droplets are studied. As a result, the closed equations of two-fluid model such as droplet velocity, gas–liquid interface velocity, and gas–liquid interface friction factor are established. The proposed two-fluid model is validated using dual mode ultrasound and differential pressure sensors, demonstrating its good applicability and extrapolation.