An electromagnetic localization method for implantable wireless capsules has been developed that employs a three-axial magnetic sensor embedded in the capsules and three energized coils attached on the abdomen. In order to further improve the localization accuracy, a novel localization model has been derived based on the Biot-Savart Law. For simplicity of the calculation without increasing the position error, the method of truncated series expansion has been used in modeling. The experiment showed that the improved model had higher precision than the original dipole model. Using the improved model, the localization error can be greatly reduced. The improved model is an elementary math function and suitable for resolving some inverse magnetic problems in engineering.