The eddy current displacement (ECD) sensors used for displacement measurement are the core component of the magnetically levitated rotor (MLR) system. The temperature compensation of the ECD sensor is an important condition to ensure the stable operation of the MLR system in a wide temperature range. This article proposes a simultaneous compensation solution based on an improved signal extraction circuit to the issue of temperature drift for the ECD sensor. First, according to the operating principle of the ECD sensor, the generating mechanism and effect of the temperature drift are analyzed. Then, the principle of the simultaneous compensation method based on an auxiliary temperature sensor is expounded, which has a simple structure and strong universality. Furthermore, in order to determine the resistance ratio parameters, the procedure of designing a temperature self-compensation circuit is given in detail. Finally, the experimental results on an ultrahigh-speed magnetically levitated centrifugal compressor validate the effectiveness of the proposed method.