The paper presents a small signal stability analysis for power systems with wind farm interaction. Power systems have damping oscillation modes that can be excited by disturbance or fault in the grid. The power converters of the wind farms can be used to reduce these oscillations and make the system more stable. These ideas are explored to design a power system stabilized (PSS) for a network with conventional generators and a wind farm in order to increase the damping of the oscillation modes. The proposed stabilizer is evaluated by simulation using DigSilent PowerFactory