Inelastic neutron scattering experiments were performed to investigate the effect of Fe substitution on the magnetic excitation spectra in a heavily hole-doped cuprate system La1.7Sr0.3Cu0.95Fe0.05O4, with an effective concentration of holes of xeff = 0.25. At T = 7 K, well-defined low-energy magnetic excitations, associated with a static magnetic order, were observed at the incommensurate positions Qtet = (0.5±δ, 0.5)/(0.5, 0.5±δ). Although the incommensurate structure resembles that observed in La2-xSrxCuO4 (LSCO) systems, the incommensurability (δ) of 0.144 (r.l.u) was larger than that of ∼0.125 (r.l.u) in LSCO with x = 0.25, suggesting an increase in δ by Fe substitution. In addition to the obvious effect on IC excitations, we show the emergence of ring-shaped magnetic excitations centered at Qtet = (0.5, 0.5) in a constant energy spectrum by Fe-substitution. These ring-shaped excitations were observed for energies below ∼8 meV, yielding a cylindrical continuum excitation in the energy and momentum spaces. Similar continuum excitations were recently observed in pristine LSCO with x = 0.25 at high temperatures, in our neutron experiments [1]. These results, which show the enhancement of δ (higher than δ = 1/8) and the stabilization of continuum excitations by Fe substitution, are incompatible with a simple pinning scenario of the stripe order, which is characterized by local spin correlations. The metallic aspect of the low-energy part of the magnetic excitation, which underlies high-temperature superconductivity in over-doped cuprate systems, would be enhanced/induced by Fe substitution.