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A novel approved algorithm based on template matching is proposed, which could be applied to the real-time tracking system. It composes of correlation matching algorithm, TD filter and ESO filter. This algorithm is used to predict the movement and to track the target. The position of target in the first image is supposed to be known. The problem is then to estimate the position of this template in subsequent images. By TD filter and ESO filter, it is possible to obtain the estimate position of the target in the current image. Then the correlation template matching algorithm is used to search target in the estimation position's neighbor in order to get target's accurate position. The simulation results of the algorithm are presented. The comparative analysis has revealed better performance characteristics of the proposed algorithm in comparison with the traditional template matching algorithm. Experimental results demonstrate the effectiveness of this method.