The handoff probability of a node depends on all the states before current moment, and considering all the states is impossible. So traditional analysis method only take the states of the previous moment into consideration, which results in large errors. A vertical handoff algorithm based on hysteretic levels of received signal strength and distance is proposed in heterogeneous networks which are composed of cellular network and wireless local area network. A two-tracking method is also proposed for analyzing the algorithm performance, which resolves the deficiencies in tradition methods. We justify the analysis effects of the new method from the number of handoffs and the block probability. Simulation results show that they are coincided with the analysis results.