As the sound signal of ships obtained by sensors contains other many significant characteristics of ships and called ship-radiated noise (SN), research into a denoising algorithm and its application has obtained great significance. Using the advantage of variational mode decomposition (VMD) combined with the correlation coefficient for denoising, a hybrid secondary denoising algorithm is proposed using secondary VMD combined with a correlation coefficient (CC). First, different kinds of simulation signals are decomposed into several bandwidth-limited intrinsic mode functions (IMFs) using VMD, where the decomposition number by VMD is equal to the number by empirical mode decomposition (EMD); then, the CCs between the IMFs and the simulation signal are calculated respectively. The noise IMFs are identified by the CC threshold and the rest of the IMFs are reconstructed in order to realize the first denoising process. Finally, secondary denoising of the simulation signal can be accomplished by repeating the above steps of decomposition, screening and reconstruction. The final denoising result is determined according to the CC threshold. The denoising effect is compared under the different signal-to-noise ratio and the time of decomposition by VMD. Experimental results show the validity of the proposed denoising algorithm using secondary VMD (2VMD) combined with CC compared to EMD denoising, ensemble EMD (EEMD) denoising, VMD denoising and cubic VMD (3VMD) denoising, as well as two denoising algorithms presented recently. The proposed denoising algorithm is applied to feature extraction and classification for SN signals, which can effectively improve the recognition rate of different kinds of ships.