This paper proposes a delta connected IM model that takes the Stator winding Inter-Turn Short Circuit (SITSC) fault into account. In order to detect the fault and evaluate its severity, an observer based FDI method is suggested. It allows the generation of residual using extended Kalman filter (EKF). To overcome the problem of the EKF initialization, the cyclic optimization method is applied to determine its tuning parameters. The advantage of the proposed approach is the real-time quantification of the fault severity and the quick fault detection. Using numerical simulation under both the healthy and the faulty conditions, the proposed IM model and EKF-based FDI approach are confirmed. Experimental results obtained by a real-time implementation on test-bench validate the simulated results.