To meet the requirements of rail-bottom flaw detection, we use a differential-triple-coil sensor at low frequencies to detect rail-bottom flaws. Aiming at its online application to railways, we propose a single-cycle demodulation algorithm. To increase the ability to remove multiple interference signals in an electromagnetic environment, we analyze the anti-interference performance of the proposed algorithm in the frequency domain. We also discuss a method of achieving high anti-noise performance in rail-bottom flaw detection. In addition, we form artificial horizontal rail-bottom flaws in a standard rail specimen and carry out experiments on four horizontal rail-bottom flaws with different depths using the embedded inspection system. The experimental results demonstrate that the differential-triple-coil sensor with the proposed single-cycle demodulation algorithm can be used for horizontal rail-bottom flaw detection. Furthermore, horizontal rail-bottom flaws with a depth of less than 7 mm can be detected.