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Wireless sensor networks (WSN) are usually composed of a great number of randomly deployed nodes that communicate among themselves and gather information about the environment. In many applications, it is required to know geographical location of the sensor which detected an event. The existing localization algorithms can be classified into two categories: range-based and range-free. Range-based algorithms measure the actual distances between nodes, while range-free algorithms approximate the distance based on connectivity information. Range-free localization is cost-effective alternative to a more expensive range based approaches since there is no necessity for additional hardware. However, these techniques usually have higher localization error compared to the range-based algorithms. DV-Hop is one of the range-free localization algorithms utilizing hop-distance estimation. In this paper, we propose an improvement of the range-free DV-Hop localization algorithm and present simulations results to evaluate it.