As an essential ecological parameter, soil moisture is important for understanding the water exchange between the land surface and the atmosphere, especially in the Loess Plateau (China). Although Synthetic Aperture Radar (SAR) images can be used for soil moisture retrieval, it is still a challenge to mitigate the impacts of complex terrain over hilly areas. Therefore, the objective of this paper is to propose an improved approach for soil moisture estimation in gully fields based on the joint use of the Advanced Integral Equation Model (AIEM) and the Incidence Angle Correction Model (IACM) from Sentinel-1A observations. AIEM is utilized to build a simulation database of microwave backscattering coefficients from various radar parameters and surface parameters, which is the data basis for the retrieval modeling. IACM is proposed to correct the deviation between the local incidence angle at the scatterer and the radar viewing angle. The study area is located in the Loess Plateau of China, where the main land cover is mostly bare land and the terrain is complex. The Sentinel-1A SAR data in C-band with dual polarization acquired on October 19th, 2017 was adopted to extract the VV&VH polarimetric backscattering coefficients. The in situ measurements of soil moisture were collected on the same day of the SAR acquisition, for evaluating the accuracy of the SAR-derived soil moisture. The results showed that, firstly, the estimated soil moisture with volumetric content between 0% and 20% was in the majority. Subsequently, both the RMSE of estimation values (0.963%) and the standard deviation of absolute errors (0.957%) demonstrated a good accuracy of the improved approach. Moreover, the evaluation of IACM confirmed that the improved approach coupling IACM and AIEM was more efficient than employing AIEM solely. In conclusion, the proposed approach has a strong ability to estimate the soil moisture in the gully fields of the Loess Plateau from Sentinel-1A data.