A resolver is an absolute shaft sensor which outputs pair signals with ortho-symmetric amplitudes. Ideally, they are sinusoidal and cosinusoidal functions of the shaft angle. In order to demodulate angular position and velocity from resolver signals, resolver-to-digital conversion (RDC) is necessary. In software-based RDC, most algorithms mainly employ a phase-locked loop (PLL)-based angle tracking observer (ATO) to form a type-II system. PLL can track the detected angle by regulating the phase error from the phase detector which depends on the feature of orthogonal symmetry in the resolver outputs. However, a type-II system will result in either steady-state errors or cumulative errors in the estimation of angular position with constant accelerations. Although type-III ATOs can suppress these errors, they are still vulnerable to high-order acceleration signals. In this paper, an improved PLL-based ATO with a compensation model is proposed. By using dynamic compensation, the proposed ATO becomes a type-IV system and can reduce position estimation errors for high-order acceleration signals. In addition, the parameters of ATO can be tuned according to the bandwidth, noise level and capability of error suppression. Simulation and experimental results demonstrate the effectiveness of the proposed method.