A system and method are provided for controlling a wind turbine. Accordingly, a controller of the wind turbine detects a transient grid event and generates a torque command via a drive-train-damper control module. The torque command is configured to establish a default damping level of a torsional vibration resulting from the transient grid event. The controller also determines at least one oscillation parameter relating to the torsional vibration and determines a target generator torque level based thereon. The target generator torque level corresponds to an increased level of damping the torsional vibration relative to the default damping level.