In recent years, there has been growing interest in self-sensing structural materials across research and industry sectors. Detecting and locating structural damage typically requires numerous sensors wired to a data acquisition (DAQ) circuit, rendering implementation impractical in real structures. This paper proposes an innovative, cost-effective sensor network for damage detection and localization in fiber-reinforced polymer composites. The innovation encompasses three key elements: (1) utilizing carbon fiber tows within the composite as piezoresistive sensors, eliminating the need for additional foreign sensor devices; (2) introducing a novel sensor layout wherein sensor tow branches with varied resistance values are connected in parallel, reducing the number of connections to the DAQ circuit and cutting manufacturing costs significantly; (3) developing a practical sensor terminal fabrication technique to minimize manufacturing expenses. The proposed design methodology for the branch resistance values is first validated using a demonstration panel. Subsequently, the overall strategy is assessed by conducting impact tests on carbon and glass fiber-reinforced composite specimens. Results validate the sensor’s ability to accurately detect and locate structural damage.