An improved algorithm based on the layer peeling (LP) method is proposed and demonstrated. The new method is shown to be effective for mitigating the impact of numerical errors on reconstruction of coupling function for strongly reflecting Bragg gratings. As examples, a flat-top dispersion-free fiber grating and a fiber-grating dispersion compensator are designed by the improved LP method. For a chirp grating, more accurate results are demonstrated in comparison with those obtained by the integral layer peeling (ILP) method.