With the increase of uncertain and intermittent renewable energy supply on the grid, the power system has become more vulnerable to instability. In this paper, we develop a demand response strategy to improve power system small-signal stability. We pose the problem as an optimization problem wherein the total demand-responsive load is held constant at each time instance but shifted between different buses to improve small-signal stability, which is measured by small-signal stability metrics that are functions of subsets of the system’s eigenvalues, such as the smallest damping ratio. To solve the problem, we use iterative linear programming and generalized eigenvalue sensitivities. We demonstrate the approach via a case study that uses the IEEE 14-bus system. Our results show that shifting the load between buses, can improve a small-signal stability margin. We explore the use of models of different fidelity and find that it is important to include models of the automatic voltage regulators and power system stabilizers. In addition, we show that load shifting can achieve similar improvements to generation shifting and better improvement than simply tuning power system stabilizers.