In this work Modified PSO (MPSO) is proposed to tune two stage lead lag control action based on STATCOM for enhancing small signal stability of an intermittent wind source penetrated power system. The Modified PSO has been compared with standard PSO and fractional PSO to tune controller parameters of STATCOM based control action. Multi machine system subjected to sudden and intermittent wind variations have been considered in this work. Subject to this wind penetration the lead lag control action with only PSO and two stage lead lag control action with fractional PSO and modified PSO has been implemented to damp the system oscillations pertaining to initial operating condition. It was found that subject to intermittent nature of wind penetration the rotor angle small signal stability is being hampered and subject to this when the modified PSO tuned two stage lead lag STATCOM control action is applied, it damps the oscillations heavily and the results have been compared with only PSO and fractional PSO control algorithms.