The cascaded H-Bridge Dynamic Voltage Restorer (DVR) is embedded into the grid in series for suppressing voltage sags. The function of the LC filter in the DVR is to eliminate the switching ripples, and an accurate tracking feature in a certain frequency range is required in the LC filter. The parameter selection of the LC filter is a key factor which decides the cost and volume of the DVR. In the cascaded H-bridge topology, the design of the LC filter is usually restricted by the output power factor and the voltage sag depth. Therefore, the paper discusses upper and lower limit functions of the inductance and the capacitance, and analyzes parameter variations under different conditions of voltage sags and power factors. Finally, an optimized design method of the LC filter is proposed for the cascaded H-bridge DVR with the consideration of double impact factors. The detailed procedure is presented, and the validity is demonstrated by the simulation result. The proposed method can improve the LC filter design for the high voltage and large capacity DVR and enhance the performance of the whole system.