This research addresses the challenge of incorporating dynamic range limiting of the magnitude response of HRTFs for hearing-impaired listeners who are using binaural hearing aids. In this application, a direct implementation of spatialization using the original HRTFs may pose a problem if some frequency areas are moved above the pain threshold or below the hearing threshold for hearing-impaired listeners. An extensive discrimination experiment was conducted with 38 normal-hearing participants to determine the maximum amount of limitation that could be applied before audible artifacts degraded the sound image. The experiment helped to determine the maximum limitation that can be applied so that at least half of the normal-hearing tested subjects cannot distinguish between the original and limited version of the spatial filters used. Although wide-dynamic range compression (WDRC) at the output of the hearing aids can produce benefits, pre-processing the HRTFs is preferable to limit its effect on the frequency spectrum and loudness. The objective is to optimize the HRTFs to diminish the risk that they are distorted by the WDRC processing in a crucial part of the sound spectrum.