In the wide-area environment, the time-delay of control signal generated in the process of transmission and treatment will produce a negative effects that can not be neglected for the stable operation of power system. A stability criterion for power system with time-varying delay based on the method of convex combination is presented. Firstly, through constructing a new type of Lyapunov-Krasovskii functional and proving its positive definiteness, the parameter constraint is relaxed. Secondly, using slack matrices and a convex combination method, the time-varying delay stability criterion, which is less conservative, is derived in terms of linear matrix inequalities. Finally, simulation results indicate that the presented method reduces the conservatism of some existing results.