A disk drive that compensates for written-in track squeeze errors (TSEs) during track following is disclosed. The disk drive may be used to compensate for TSEs when determining the position error signal (PES) by implementing operations that include: determining a track squeeze value for a servo sector based upon read servo bursts; determining a PES value for the servo sector based upon read servo bursts; estimating a Squeeze Correction Coefficient (SCC) to account for track squeeze induced PES sensing gain variation associated with the servo sector based upon the PES value and the track squeeze value; calculating a squeeze corrected PES value based upon the SCC and the PES value; and utilizing the squeeze corrected PES value in servo control.