Indoor localization is challenging in densely populated urban areas due to the multipath effect, attenuation, noise, and difficulty finding reliable Wi-Fi access points. In urban flats, multiple access points are not easily available or require infrastructure setup, which increases cost. To address the above issues, the article proposes a new algorithm called ‘H2LWRF-PDR’ based on Wi-Fi fingerprinting using a single access point with extended features. This algorithm is designed for static and moving objects. The proposed algorithm first converts the received signal strengths from a single access point into five statistical features used as fingerprints. Then, hierarchical clustering is applied to remove outliers from the fingerprints. Then, a random forest classifier is used to predict the cluster values. Finally, the lowess filters are used to smoothen the output values from the classifier. Furthermore, these outputs are combined with the proposed Pedestrian Dead Reckoning (PDR) algorithm. In the end, a Savitzky–Golay filter is utilized to remove the fluctuations in the trajectories. The proposed approach has been validated in urban flat and laboratory environments and compared with state-of-the-art localization algorithms. The proposed algorithm ‘H2LWRF-PDR’ showed 50% improvements in an urban flat dataset and at least 30% in the laboratory dataset.