A passive structural health monitoring system was presented for sensing foreign-object impact by using a semiconductor optical amplifier-based Fiber Bragg Grating (FBG) sensor that monitors high frequency dynamic strains. Strains applied on the FBG sensors were encoded as wavelength shifts of the light reflected by the FBG sensor which were then converted into phase shifts and demodulated by the Michelson interferometer. A Proportion Integration Differentiation(PID) feedback controller was employed to prevent interference drifting away from quadrature due to temperature and low frequency fluctuations. The adaptability of the demodulator and the optimum optical path difference were investigated. The impact signal from FBG dynamic strain sensor is acquired at the frequency up to 197 kHz.