Structural health monitoring (SHM) methods are widely used to detect defects in aeronautical, civil, and mechanical engineering structures. Structural defects may occur due to crack initiation and propagation, fatigue damage, or deterioration of structural connections. The growth of such defects can lead to catastrophic failures or mechanical breakdowns. Therefore, early detection of defects is essential to prevent structural failure. A typical normalization approach is applied to normalize the dynamic response measurements, including natural frequencies and mode shapes. These vibration measurements are obtained from measured input–output data during modal parameter estimation of the structure. In the present study, normalized vibration measurement parameters are utilized for defect detection. The proposed methodology is based on calculating the normalized ratio of natural frequencies obtained from intact and defected finite element (FE) models of beam structures. These normalized ratios are employed to localize damage within the structure, while defect size estimation is performed using the damage ratio derived from comparisons between intact and damaged states. Various defect cases are investigated using the normalized natural frequency ratios. Several numerical procedures are carried out to evaluate the applicability and effectiveness of the proposed method. Damage localization is achieved by analyzing normalized frequencies across different segmented defect zones of the beam. Furthermore, defect magnitude is estimated by correlating normalized natural frequency variations with the percentage of damage severity.