Destabilizing effects due to rotating damper's in a gyrating or spinning systems is a very common phenomenon. Rotor's at speed higher than certain threshold values become unstable due to rotating damping forces generated by dissipation in rotor materials, coupling or due to friction in spline's and tool tip's. Presently the current methods are mostly passive and suitable for large or medium size rotor's but not quite applicable for small, mini or micro rotor systems. This paper uses an alternative technique to stabilize rotors of any size and description. The authors propose a piezo electrical type of actuating system for applying damping force to the rotating shaft by implementing a smart embedded coupling which rotates along with the rotor. The stabilization control was implemented by designing a simple state feedback Linear Quadratic Regulator whose gains were determined and applied to the rotor shaft through proposed smart embedded coupling.