Wireless sensors networks represent the architecture of choice for distributed monitoring due to the ease of deployment and configuration. We developed a distributed sleep monitoring system which combines wireless inertial sensors SP-10C by Sensoplex controlled by a custom smartphone application as an extension of the polysomnographic (PSG) monitor SOMNOscreen plus from Somnomedics. While existing activity monitors are wired to the SOMNOscreen, our system allows the use of wireless inertial sensors to improve user's comfort during sleep. The system is intended for monitoring of periodic leg movements (PLM) and user's activity during sleep. Wireless sensors are placed on ankle and toes of the foot in a customized sock. An Android app communicates with wireless sensors over Bluetooth Smart (BTS) link and streams 3D accelerometer values, 4D unit quaternion values and timestamps. In this paper we present a novel method of synchronization of data streams from PSG and inertial sensors, and original method of detection of PLM events. The system was tested using five experiments of simulated PLM, and achieved 96.51% of PLM detection accuracy.