Lake Taihu has highly turbid inland waters with complex optical properties. Due to the bottom effect of submerged aquatic plants in optically shallow waters, currently available phytoplankton chlorophyll-a retrieval algorithms tend to overestimate chlorophyll-a concentrations in the eastern part of Lake Taihu. This overestimation can distort the eutrophication evaluation of the entire lake. This paper identifies submerged and emergent plants, determines the retrieval models for the upwelling (K_u) and downwelling (K_d) irradiance attenuation coefficients, and proposes a phytoplankton chlorophyll-a retrieval model using a water depth optimization-based method to remove the bottom effect. The results show the following: (1) The normalized difference vegetation index (NDVI) method can distinguish the bottom mud (NDVI < −0.46) and submerged aquatic plants (−0.46 ≤ NDVI < 0.52) from the emergent plants (NDVI ≥ 0.52) with 90% accuracy. (2) The downwelling and upwelling irradiance attenuation coefficients are highly correlated with the suspended sediments, and retrieval models for these coefficients in three visible bands with high accuracy are presented. (3) Compared to traditional algorithms without bottom effect removal, the proposed chlorophyll-a concentration estimation algorithm based on the water depth-optimized bottom effect removal method efficiently reduces the bottom effect of the submerged aquatic plants. The root mean square error (RMSE) for the obtained chlorophyll-a concentrations decreases from 45.61 ${\mathsf{\mu }\mathrm{g}·\mathrm{L}}^{-1}$ to 8.69 ${\mathsf{\mu }\mathrm{g}·\mathrm{L}}^{-1}$, and the mean absolute percentage error (MAPE) is reduced from 245.12% to 19.58%. In the validation step, the obtained RMSE of 10.89 ${\mathsf{\mu }\mathrm{g}·\mathrm{L}}^{-1}$ and MAPE of 17.52% are consistent with the proposed algorithm. This research provides a good reference for the determination of chlorophyll-a concentrations in phytoplankton in complex inland water bodies. The findings are potentially useful for the operational monitoring of harmful algal blooms in the future.