In this paper, a two-stage battery energy storage system (BESS) is implemented to enhance the operation condition of conventional battery storage systems in a microgrid. Particularly, the designed BESS is composed of two stages, i.e., Stage I: integration of dispersed energy storage units (ESUs) using parallel DC/DC converters, and Stage II: aggregated ESUs in grid-connected operation. Different from a conventional BESS consisting of a battery management system (BMS) and power conditioning system (PCS), the developed two-stage architecture enables additional operation and control flexibility in balancing the state-of-charge (SoC) of each ESU and ensures the guaranteed small-signal stability, especially in extremely weak grid conditions. The above benefits are achieved by separating the control functions between the two stages. In Stage I, a localized power sharing scheme based on the SoC of each particular ESU is developed to manage the SoC and avoid over-charge or over-discharge issues; on the other hand, in Stage II, an additional virtual impedance loop is implemented in the grid-interactive DC/AC inverters to enhance the stability margin with multiple parallel-connected inverters integrating at the point of common coupling (PCC) simultaneously. A simulation model based on MATLAB/Simulink is established, and simulation results verify the effectiveness of the proposed BESS architecture and the corresponding control diagram.