Aiming at the problems of spectrum leakage, difficulty in guaranteeing demodulation accuracy, and endangering driving safety in signal detection algorithm based on periodogram with limited sampling duration, this paper proposes for the first time a kind of ZPW-20000 frequency-shift signal detection algorithm based on nonlinear least squares, so as to improve the detection performance of ZPW-2000 frequency-shift signal, to ensure the safe operation of trains, and to improve the operational efficiency. The mathematical model of ZPW-2000 frequency-shift signal is established, the Cramér-Rao bound (CRB) for carrier-frequency and low-frequency estimation are derived, and a nonlinear least squares algorithm containing three processes, namely, the coarse estimation, the grid search based on Fast Fourier Transform (FFT), and the exact search, is designed, which is applied to the detection of ZPW-2000 frequency-shift signal. The research results show that the accuracy of carrier-frequency and low-frequency estimation of the proposed algorithm is better than that of the periodogram method for different sampling durations, and the number of decoding errors of the proposed algorithm and the periodogram method is reduced to zero when the sampling durations are greater than or equal to 0.11 s and 0.19 s, respectively, and the proposed algorithm reduces the limitation on the sampling durations. As the signal-to-noise ratio (SNR) increases, the root mean square error (RMSE) of carrier-frequency and low-frequency estimation of the proposed algorithm can approach the CRB. when the SNR of −2 dB, the number of decoding errors of the proposed algorithm is reduced to zero, while the periodogram method requires the SNR of 2 dB to achieve the same effect. The proposed algorithm performs well in detection accuracy, real-time and anti-interference ability, which is of great significance for ensuring driving safety and improving the reliability of the vehicle-ground communication mode based on ZPW-2000 track circuit.