This paper describes an improved Prony method in its speed, accuracy and reliability by efficiently determining the optimal sampling interval with use of DFT (discrete Fourier transformation). In the Prony method the computation time is dominated by the size of the linear prediction matrix, which is given by the number of data times the modeling order The size of the matrix in a general Prony method becomes large because of large number of data and so does the computation time. It is found that the Prony method produces satisfactory results when SNR is greater than three. The maximum sampling interval resulting minimum computation time is determined using the fact that the spectrum in DFT is inversely proportional to sampling interval. Also the process of computing the modes is made efficient by applying Hessenberg method to the companion matrix with complex shift and computing selectively only the dominant modes of interest. The proposed method is tested against the 2003 KEPCO system and found to be efficient and reliable. The proposed method may play a key role in monitoring in real time low frequency oscillations of power systems .