We demonstrate stable mode-locked pulses in an erbium-doped fiber laser (EDFL) using a femtosecond laser-inscribed small-period long-period grating (SP-LPG). The SP-LPG has a period of 25 µm and a length of 2.5 mm. The polarization dependent loss (PDL) of the SP-LPG reaches 20 dB at the wavelength of 1556 nm and 25 dB at the wavelength of 1607 nm, which is sufficient to trigger the mode-locking mechanism. In addition, a mode-locked fiber laser (MLFL) based on the SP-LPG has been demonstrated to generate 1.58-ps pulses at 1577 nm with a bandwidth of 4 nm and a repetition rate of 1.54 MHz. The signal-to-noise ratio (SNR) of 50 dB shows the high stability of this system. This work indicates various potential applications of the SP-LPG in ultra-fast laser technologies due to its simple fabrication, compact structure, and high damage threshold.