We successfully enhanced the performance of a spin valve by inserting an ultra-thin layer of partially oxidized Fe in the pinned and free layers. With the exchange bias field kept large, the spin valve reached a GMR of 12%, which corresponded to a 55% increase in GMR when we compared it with that of spin valves without any inserted layer. The layer of partially oxidized Fe was more effective for improving the properties of the spin valve than the layer of partially oxidized $Co_{90}Fe_{10}$. Considering all the results, we can contribute the significant improvement to the combined effect of the modified local electronic structures at the Fe impurities and theenhanced spin-dependent reflections at the $alpha-Fe_{2}O_{3} phase in the magnetic layer.