Agriculture is one of the fundamental economic activities in most countries; however, this sector suffers from various natural hazards including flood and drought. The determination of drought-prone areas is essential to select drought-tolerant crops in climate sensitive vulnerable areas. This study aims to enhance the detection of agricultural areas with vulnerability to drought conditions in a heterogeneous environment, taking Bangladesh as a case study. The normalized difference vegetation index (NDVI) and land cover products from the Moderate Resolution Imaging Spectroradiometer (MODIS) satellite images have been incorporated to compute the vegetation index. In this study, a modified vegetation condition index (mVCI) is proposed to enhance the estimation of agricultural drought. The NDVI values ranging between 0.44 to 0.66 for croplands are utilized for the mVCI. The outcomes of the mVCI are compared with the traditional vegetation condition index (VCI). Precipitation and crop yield data are used for the evaluation. The mVCI maps from multiple years (2006–2018) have been produced to compute the drought hazard index (DHI) using a weighted sum overlay method. The results show that the proposed mVCI enhances the detection of agricultural drought compared to the traditional VCI in a heterogeneous environment. The “Aus” rice-growing season (sown in mid-March to mid-April and harvested in mid-July to early August) receives the highest average precipitation (>400 mm), and thereby this season is less vulnerable to drought. A comparison of crop yields reveals the lowest productivity in the drought year (2006) compared to the non-drought year (2018), and the DHI map presents that the north-west region of Bangladesh is highly vulnerable to agricultural drought. This study has undertaken a large-scale analysis that is important to prioritize agricultural zones and initiate development projects based on the associated level of vulnerability