In this study, we investigated the enhanced sensing performance of a localized surface plasmon resonance (LSPR) biosensor by employing metal-dielectric double-layered subwavelength grating structures. The numerical results showed that the LSPR substrate with a dielectric spacer can provide not only a better sensitivity but also a significantly improved reflectance characteristic. While the presence of metallic gratings leads to a broad and shallow reflectance curve inevitably, the dielectric spacer can prevent the propagating surface plasmons from being interfered by the locally enhanced fields excited at the gold gratings, finally resulting in a strong and deep absorption band at resonance. Therefore, the proposed structure could potentially open a new possibility of the enhanced LSPR detection for monitoring biomolecular interactions of low molecular weights.