When calculating the speed from the position of permanent magnet synchronous motor (PMSM), the accuracy and real-time are limited by the precision of the sensor. This problem causes crawling and jitter at very-low speed. Using the angle from the position sensor, an extended Kalman filter (EKE) designed in dq-coordinate is presented to solve this problem. The usage of position sensor simplifies the model and improves the accuracy of speed estimation. Specially, a closed loop optimal (CLO) method is devised to overcome the difficulty to adjust the parameters of the EKF. The EKF is the feedback link of speed control, CLO method is derived from the perspective of the speed step response to optimize the measurement covariance matrix and the system covariance matrix of EKF. Simulation and experimental results, comparing the low-speed performance of the EKF and sensor feedback methods, prove the effectiveness of the method to adjust the parameters of EKF and the advantages in eliminating the low speed jitter. (C) 2013 ISA. Published by Elsevier Ltd. All rights reserved.