In this present study, a Beam on Nonlinear Winkler Foundation approach has been utilized to study the effect of ground improvement on deformation characteristics of laterally loaded pile. Fourth-order governing differential equation of pile deformation has been solved, and a simplified pile–soil stiffness matrix has been developed. The optimum depth (from ground surface) up to which engineering properties of soil require to be improved has been ascertained using a computer code developed in MATLAB utilizing the developed soil–pile stiffness matrix. This optimum depth can be defined as the depth beyond which the improvement in engineering properties of soil (e.g., deformation modulus) has negligible effect on deformation characteristics of laterally loaded pile. Optimum depth has been suggested for different slenderness ratios of piles installed in soft-to-medium-stiff clayey soil deposit, and statistical equations have been developed to find the optimum depth of ground improvement for different pile slenderness ratios (L/D) and relative stiffness (Ep/Es) of pile. The study reveals that the optimum layer improvement ratio (L1/L) reduces with the increased pile slenderness ratio (L/D) and increases with the increased relative stiffness (Ep/Es) of pile. Design charts have been proposed to get a preliminary estimation of lateral pile capacity in virgin clay as well as improved clay for different layer improvement ratios (L1/L).