Power system dynamic simulation demands substantial computation due to extensive interconnection among power systems. Traditionally, the computational burden has been reduced by using dynamic equivalent methodologies, such as modal, coherency and measurement-based. Measurement-based method replaces an external system with a simple equivalent and estimates its parameters through optimization method with measurement. However, the conventional method does not clearly present the model structure for the external equivalent. This ambiguity, then, may lead to poor performance of the equivalent. The proposed method uses generator equivalent model and shows how to choose a proper number of generators for the equivalent model structure using coherency concept. The approach preserves relevant modes from the external and thus enhances the simulation performance of the dynamic equivalent. Test results of a simple power system are presented and show a high level of accuracy of the proposed method.