Because wavelet transforms have the characteristic of decomposing signals that are similar to the human acoustic system, speech enhancement algorithms that are based on wavelet shrinkage are widely used. In this paper, we propose a new speech enhancement algorithm of hearing aids based on wavelet shrinkage. The algorithm has multi-band threshold value and a new wavelet shrinkage function for recursive noise reduction. We performed experiments using various types of authorized speech and noise signals, and our results show that the proposed algorithm achieves significantly better performances compared with other recently proposed speech enhancement algorithms using wavelet shrinkage.