Nowadays, the development of modern optical systems relies on optical device size minimization and operating power reduction. Optical modulator based on silicon on insulator (SOI) platform is a key element in different optical systems. Therefore, the optical modulator with compact size and low insertion loss could improve the optical system efficiency. In this work, a novel compact optical modulator based on hybrid plasmonic/silicon layers is introduced. The full vectorial finite element method (FV-FEM) is used to numerically analyze the proposed design. Vanadium dioxide (VO2) is also utilized as a cap layer to control the modulation process. The insertion loss (IL) and extinction ratio (ER) of the suggested modulator are equal to 2.1 dB/µm and 28 dB/µm, respectively, at the operating wavelength 1.55 µm. Consequently, high figure-of-merit (FoM) =ER/IL = 13.5 is achieved with an optical bandwidth (ER > 3 dB) greater than 1 µm, which is large in comparison to pervious designs.