This paper presents an effective method to improve efficiency of switched reluctance motor by optimizing energy conversion loop. A nonlinear analytical model which takes saturation account is developed to calculate inductance and flux-linkage. The flux-linkage curve is studied to calculate the co-energy increment to obtain the optimum exciting current. For a given cross-section, the exciting current at which co-energy increment is maximum was found to be constant while stack length varies. Then the energy conversion loop was optimized by varying the stack length and turns of windings. The constraints during optimization were that motor was excited by the maximum increment co-energy current and the energy in the loop was determined by rated power of motor. Dynamic finite element analysis was used to evaluate the efficiency of various models and the comparison of results shows promising effects of the proposed method. Experiment was also conducted to validate the simulation result.