A novel numerical iterative approach is proposed to effectively eliminate the zero-order term and to improve the signal-to-noise ratio of the reconstructed image in off-axis digital holography. The iterations are conducted in the spatial domain, resulting in considerable reduction in the computational time and avoiding the subjectivity involved in selecting a filter window in spectral domain. These advantages promote the application of this approach in real-time detection processes. The feasibility of this approach is confirmed by mathematical deductions and numerical simulations, and the robustness of the proposed approach is tested by means of an experimentally obtained hologram.