To mitigate the failure of a Hilbert transform-based fixed-threshold multi-peak demodulation algorithm in distributed Fiber Bragg Grating (FBG) sensing systems with light noise, an adaptive multi-peak demodulation algorithm based on the Hilbert transform is proposed in this paper. The algorithm adopts the thought of Divide and Conquer, including reflection spectrum segmentation and single peak detection. Multiple sub-spectra of the FBG multi-peak spectrum is segmented by the Hilbert transform and calculating adaptive threshold method, and then the Gaussian fitting algorithm is used to achieve the precise positioning of the spectral peaks. Theoretical analyses and simulation results show that the algorithm using an adaptive threshold as a threshold of splitter can greatly improve the portability of the algorithm in complex situations, and improve the algorithm's noise resistance, demodulation speed, and accuracy. It shows that the algorithm provides a new way of demodulation for distributed FBG sensing systems.