In this paper, a new time-domain method for detecting structural local damage has been developed, which is based on the measured strain signals. The “pseudo strain energy density (PSED)” is defined and used to build two major damage indexes, the “average pseudo strain energy density” (APSED) and the “average pseudo strain energy density changing rate” (APSEDR). A probability and mathematical statistics technique is utilized to derive a standardized damage index. Afterwards, these indexes are used to establish the damage identification strategies for beam structures and plate structures respectively. Furthermore, the wavelet packet transform is used to pre-process the measured dynamic strain signals. Then, the effectivity of the new damage identification method is confirmed by numerical simulations. Finally, a laboratory beam model experiment is conducted to verify this method examine the feasibility and applicability of the new method.