The accumulation of space charge in a coaxial cable under high-voltage direct current (HVDC) may lead to the serious distortion of the internal electrical field, and thus extremely affect the long-term reliability of the cable in service. Therefore, it is significant to measure the space charge characteristic in a full-size power cable in real time. However, because of the existence of a temperature gradient across the cable insulation under DC electrical stress, the density of the dielectric will be inhomogeneous. Moreover, the effect of the coaxial structure on the distortion of measuring waveforms has to be taken into consideration. In this paper, an improved pulsed electroacoustic (PEA) system suited for a full-size power cable under a temperature gradient was realized by designing the units of pulse injection and signal detection. Then, the charge density was corrected according to the nonuniform electric stress distribution and the divergent acoustic propagation. Finally, the system transfer function was amended by adding the dispersion coefficient’s quadratic approximation to the general solution of the general wave propagation equation. With this new recovery algorithm, the distortion of the waveform caused by the cable’s coaxial structure, acoustic waves’ attenuation and dispersion, and temperature gradient effect can be recovered successfully.