The auditory system allows the estimation of the distance to sound-emitting objects using multiple spatial cues. In virtual acoustics over headphones, a prerequisite to render auditory distance impression is sound externalization, which denotes the perception of synthesized stimuli outside of the head. Prior studies have found that listeners with mild-to-moderate hearing loss are able to perceive auditory distance and are sensitive to externalization. However, this ability may be degraded by certain factors, such as non-linear amplification in hearing aids or the use of a remote wireless microphone. In this study, 10 normal-hearing and 20 moderate-to-profound hearing-impaired listeners were instructed to estimate the distance of stimuli processed with different methods yielding various perceived auditory distances in the vicinity of the listeners. Two different configurations of non-linear amplification were implemented, and a novel feature aiming to restore a sense of distance in wireless microphone systems was tested. The results showed that the hearing-impaired listeners, even those with a profound hearing loss, were able to discriminate nearby and far sounds that were equalized in level. Their perception of auditory distance was however more contracted than in normal-hearing listeners. Non-linear amplification was found to distort the original spatial cues, but no adverse effect on the ratings of auditory distance was evident. Finally, it was shown that the novel feature was successful in allowing the hearing-impaired participants to perceive externalized sounds with wireless microphone systems.