The grounding impedance is not lowered by expanding the dimension of the grounding electrode, and the length of grounding electrode which shows the minimum value of the grounding impedance for each condition of frequency and soil characteristics is existent, and it is defined as Critical Length. In this paper, a new distributed parameter circuit model considering the condition of the multi-layered soil structures was proposed, and the grounding impedance and critical length of the vertical grounding electrode were analyzed by using the newly proposed simulation model and the MATLAB program. As a consequence, it was found that the effect of the soil structure on the frequency-dependent grounding impedance and critical length of the vertical grounding electrode is significant. It is desirable to consider the soil structure in optimal design of the grounding system.