Centralized wide area control design using system-wide data has been suggested to enhance large interconnected power system dynamic performance. Because of the nature of wide area interconnections, communication delay cannot be ignored in wide area control. A long time delay may be a detriment to system stability and degrade system robustness. The general linear fractional transformation (LFT) method to describe the time delay uncertainty can lead to a conservative design. In this paper, a gain scheduling (GS) method based on linear matrix inequality (LMI) is proposed to design a dynamic controller to accommodate time delays in supervisory power system stabilizer (PSS) design. The new approach achieves better performance than the general LFT method, and the order of the controller remains the same with that of the system plant.