In this paper, an n-star general dynamic model of tethered satellite system with closed-loop configuration is provided. An analytical method for periodic solution stability of the general dynamic model is proposed based on Floquet theory, which proved that the periodic solution stability of the system depends on the maximum modulus for the eigenvalue of a matrix related to the Jacobian matrix. The periodic solution stability of a 3-star system with equilateral triangle as the initial configuration is analyzed as an example based upon the analytical method. The critical stable spin angular velocity of the 3-star system is analyzed when the system spins clockwise, and its numerical simulation is carried out to verify the results. The results show that the analytical method of periodic solution stability can solve the critical stable spin angular velocity accurately of the tethered satellite system, and the 3-star system can guarantee stable spin when the spin angular velocity is about 2.1 times of its revolution angular velocity, otherwise the disturbed system will not be able to re-converge to the initial configuration in finite time.