Shrapnel injury is a major cause of death in victims of bomb blast, land mines, and gun fire. Currently, doctors rely on imaging systems to locate the shrapnel before surgery. But, since these images do not provide any real-time information of the location of the shrapnel, effectiveness of surgery solely depends on the doctors' skill to trace them. Therefore, in some cases, the shrapnel, in spite of being visible in the images, may become untraceable during surgery. Hence, an online tool that can help the surgeon in finding the location of the shrapnel during the surgery will be very effective. A prototype of such a tool has been realized using an inductive proximity sensor (IPS). The new IPS is small enough for inserting into the victim's body. Since the detection depth (DD) of an IPS decreases with its diameter, this IPS uses a differential sensing scheme for detection. Hence, the new sensor achieves DDs longer than its diameter. The design of the sensor takes care of the effects of parasitic parameters that become predominant as the size gets smaller and ensures repeatable results. The tool also features a special excitation scheme that has multiple advantages when compared with existing schemes. The details of the sensor, its excitation and performance against different targets under various conditions are presented in this paper. © 2014 IEEE.