This study analyses the effect of replacing existing synchronous generators (SGs) equipped with power system stabilisers (PSS) by doubly fed induction generator (DFIG) based wind farms on the damping of power system oscillations in a multi-machine power system. A power system stabiliser was designed to enhance the capability of DFIG to damp power systems oscillations. The validity and effectiveness of the proposed controller are demonstrated on the widely used New England 10-machine 39-bus test system that combines conventional SGs and DFIG based wind farms using eigenvalue analysis and non-linear simulation. The non-linear simulation is used to demonstrate how the damping contribution of DFIG based wind farms is affected by different operating conditions within the same wind farm and stochastic wind speed behaviour. The results show that installing conventional fixed parameters PSS within reactive power control loop of DFIG rotor side converter has a positive damping contribution for a wide range of operating conditions. Furthermore, the results clearly show that DFIG based wind farms equipped with the proposed farm level PSS can damp power system oscillations more effectively than SGs PSS.