In this paper we address the issue of improving the spatial reuse in virtual carrier sensing (VCS) mechanisms for wireless networks. The paper examines in detail the channel reservation mechanisms of IEEE 802.11 VCS and shows that its spatial reuse is sub-optimal in a number of scenarios. We also show that the area that should be reserved by the VCS depends on the distance between the transmitter and receiver. We then present a novel VCS scheme that optimizes spatial reuse by incorporating this distance information in the decision making process for the channel reservation. Unlike existing proposals for improving spatial reuse, our scheme does not rely on special hardware design such as directional antennas, power adaptable or dual-channel devices etc., and is thus easily implementable. Simulation results quantify and demonstrate the substantial performance improvements obtained by the proposed scheme.