This paper proposes an improved frequency estimation algorithm using discrete Fourier transform (DFT) interpolation based on the Quinn algorithm and iterative interpolation algorithm (A&M algorithm). The proposed algorithm first uses a frequency error estimated by the Quinn algorithm as the initial error value of the iterative estimation algorithm. Then frequency error is estimated accurately by the iteration algorithm. The algorithm can effectively reduce the number of iterations and guarantee the precision of estimation results, thus improving the computational efficiency. To enhance the efficiency of the algorithm on the DSP processor, this paper also proposes an optimization method for the implementation of the algorithm on the DSP processor, which is helpful for the application of the algorithm in real time. The simulation results show that the proposed algorithm can increase the frequency estimation accuracy, and the efficiency of real-time computation with good anti-noise performance.