We explore the possibility that the unusually large electroclinic effect observed in the smectic-A phase of a ferroelectric liquid crystal arises from the presence of an ordered array of disclination lines and walls in a smectic-C* phase. If the spacing of these defects is in the subvisible range, this modulated smectic-C* phase would be similar macroscopically to a smectic-A phase. The application of an electric field distorts the array, producing a large polarization, and hence a large electroclinic effect. We show that with suitable elastic parameters and sufficiently large chirality, the modulated phase is favored over the smectic-A and helically twisted smectic-C* phases. We propose various experimental tests of this scenario.