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A distributed regional Traffic Signal Optimization Hardware-in-loop Simulation (TSOHS) system is designed, which aims at improving the operating ability for post-graduate students. The main components of the TSOHS system include 1 Center Server, 5 local intersection controllers and 120 traffic lights. The traffic lights can be controlled by each local intersection controller in defined control strategies, the defined control strategies in local intersection controller will be adjusted in Center Server through dynamic optimization method online. The communication among local intersection controllers and Center Server adopts RS-485 and zigbee patterns. The optimization algorithm programmed in C language by students can be put in the Center Server, and running in TSOHS, so that the validity of the traffic optimization algorithms can be tested. Two fuzzy optimization algorithms are used to test TSOHS. Experimental results show TSOHS is effective to accomplish traffic signal optimization simulation.