Distributed video coding (DVC) architecture designs, based on distributed source coding principles, have benefitted from significant progresses lately, notably in terms of achievable rate-distortion performances. However, a significant performance gap still remains when compared to prediction-based video coding schemes such as H.264/AVC. This is mainly due to the non-ideal exploitation of the video sequence temporal correlation properties during the generation of side information (SI). In fact, the decoder side motion estimation provides only an approximation of the true motion. In this paper, a progressive DVC architecture is proposed, which exploits the spatial correlation of the video frames to improve the motion-compensated temporal interpolation (MCTI). Specifically, Wyner-Ziv (WZ) frames are divided into several spatially correlated groups that are then sent progressively to the receiver. SI refinement (SIR) is performed as long as these groups are being decoded, thus providing more accurate SI for the next groups. It is shown that the proposed progressive SIR method leads to significant improvements over the Discover DVC codec as well as other SIR schemes recently introduced in the literature.