Over a period of six years, volunteers with hearing loss were found to have a rate of mental decline up to 40 per cent faster than those who could hear normally.
Levels of declining brain function were directly related to the amount of hearing loss, said the researchers.
On average, older adults with hearing loss developed significant mental impairment 3.2 years sooner than individuals whose hearing was sound, the 'Daily Mail' reported.
Almost 2,000 men and women between the ages of 75 and 84 took part in the research, part of an investigation called the Health, Aging and Body Composition (Health ABC) study.
All were given hearing tests which involved listening to a range of soft and loud sounds in a soundproof room.
Hearing loss is defined as only being able to recognise sounds louder than 25 decibels.
The volunteers also had their brain function assessed using standard tests of memory and thinking ability.
None had any evidence of mental decline when the study began in 2001.
"Our results show that hearing loss should not be considered an inconsequential part of ageing, because it may come with some serious long-term consequences to healthy brain functioning," lead scientist Dr Frank Lin, from Johns Hopkins University in the US, said.
Possible reasons for the link include ties between hearing loss and social isolation, said Lin. Previous research has shown that loneliness is a risk factor for mental decline.
Poor hearing may also force the brain to devote too much of its energy to processing sound, at the expense of memory and thinking, researchers said.
Another possibility is that some common underlying form of neurological damage leads both to hearing loss and mental problems, said Lin.
The team now plans a much larger study to look at whether hearing aids or other devices used to treat hearing loss can delay mental decline.
The findings were published in the journal JAMA Internal Medicine.