To improve the operating performance of electric propulsion ships, the permanent magnet synchronous motor is commonly used as the propulsion motor. Additionally, position estimation without sensors can further improve the application range of the propulsion motor and the estimated results can represent the redundancy of measured values from mechanical sensors. In this paper, the high-frequency (HF) injection algorithm combined with the second-order generalized integrator (SOGI) is presented on the basis of analyzing the structure of the electric propulsion ship and the vector control of the motors. The position and rotor speed were estimated accurately by the approximate calculation of q-axis currents directly related to the rotor position. Moreover, the harmonics in the estimated position were effectively reduced by the introduction of the second-order generalized integrator. Then, the rotor position estimation algorithm was verified in MATLAB/Simulink by choosing different low speeds including speed reversal, increasing speed, and increasing load torque. Finally, the correctness of the proposed improved high-frequency injection algorithm based on the second-order generalized integrator was verified by the experimental propulsion permanent magnet synchronous motor (PMSM) system at low speed.