In this paper a new power system stabilizer based on fuzzy systems is designed. The new fuzzy logic power system stabilizer is applied to renewable energy distributed generation system comprising of a wind turbine driving a 3-phase synchronous generator connected to the grid. The proposed controller significantly improves system performance. The enhancement in the system dynamic response is verified through simulation results of a system under different operating conditions and exposed to both small and large disturbances. Extension to the wind energy distributed generation based multi-machine case is also included to illustrate the effectiveness of the proposed stabilizer in damping power system swing mode oscillations that follow disturbances.