To enhance the sensitivity of fiber-optic strain sensors utilizing the virtual vernier effect, this paper proposes a serrated fiber Mach-Zehnder interferometer (MZI) design. The sensing region of a capillary fiber was etched with serrated microstructures via CO₂ laser processing, reducing its cross-sectional area to induce strain concentration and thereby significantly amplify the intrinsic sensitivity of the sensing interferometer. Experimental results demonstrate that at a serration depth of 30 μm, the strain sensitivity of the sensing interferometer reaches 2.5 pm/με. Further amplification was achieved by applying the virtual vernier effect, where the sensing signal was superimposed with a virtual reference signal (amplification factor = 136.6). This dual-path optimization resulted in an envelope valley strain sensitivity of 341.75 pm/με for the virtual vernier effect sensor, significantly surpassing the performance of existing comparable sensors. This methodology synergistically optimizes both the interferometer's structural design and the virtual vernier effect amplification, establishing a novel paradigm for designing high-sensitivity fiber-optic strain sensors.