With satellite soil moisture (SM) retrievals becoming widely and continuously available, we aim to develop a method to objectively integrate the drought indices into one that is more accurate and consistently reliable. The data sets used in this paper include the Noah land surface model‐based SM estimations, Atmosphere‐Land‐Exchange‐Inverse model‐based Evaporative Stress Index, and the satellite SM products from the Advanced Scatterometer, WindSat, Soil Moisture and Ocean Salinity, and Soil Moisture Operational Product System. Using the Triple Collocation Error Model (TCEM) to quantify the uncertainties of these data, we developed an optically blended drought index (BDI_b) that objectively integrates drought estimations with the lowest TCEM‐derived root‐mean‐square‐errors in this paper. With respect to the reported drought records and the drought monitoring benchmarks including the U.S. Drought Monitor, the Palmer Drought Severity Index and the standardized precipitation evapotranspiration index products, the BDI_b was compared with the sample average blending drought index (BDI_s) and the RMSE‐weighted average blending drought indices (BDI_w). Relative to the BDI_s and the BDI_w, the BDI_b performs more consistently with the drought monitoring benchmarks. With respect to the official drought records, the developed BDI_b shows the best performance on tracking drought development in terms of time evolution and spatial patterns of 2010‐Russia, 2011‐USA, 2013‐New Zealand droughts and other reported agricultural drought occurrences over the 2009–2014 period. These results suggest that model simulations and remotely sensed observations of SM can be objectively translated into useful information for drought monitoring and early warning, in turn can reduce drought risk and impacts.