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This paper proposes an efficient and scalable dynamic traffic grooming algorithm suitable for large WDM mesh networks by limiting the zone where lightpaths for new connection requests are searched. Besides, in order to maintain the multi-hop grooming flexibility, the searching zone can be dynamically enlarged according to the availability of groomable existing or new lightpaths and the physical connectivity between network nodes. We develop a mathematical model to estimate the possibility that a node connects the source and destination when included to enlarge the searching zone, and to ensure that the selected lightpath is resource-efficient. Simulation results demonstrate that the proposed algorithm can significantly reduce the computations and improve the blocking performance.