The concept of hierarchical networks is useful for designing a large heterogeneous NoC by reusing predesigned small NoCs as subnets. It can also be helpful when analyzing and designing a large NoC as interconnection of subnets at a higher level of abstraction. Hierarchical deadlock-free routing is required to enable deadlock-free interconnection of sub-networks with different internal routing algorithms. In this paper we show that multi-level addressing is a cost-effective implementation option for hierarchical deadlock-free routing. We propose a two-level routing scheme, which is not only efficient, but also  enables co-existence of algorithmic and table-based implementation in one router. A hierarchical view of the network simplifies addressing of network nodes and address decoding in the router. Synthesis results show that a 2-level hierarchical router design for an 8x8 NoC, can reduce area and power requirements by  up to ~20%, as compared to a router for the flat network. This work also proposes a new possibility for increasing the number of nodes available for subnet-to-subnet interfaces, while keeping the properties of hierarchical deadlock-freedom. We evaluate and discuss the communication performance in a 2-level hierarchical network for various subnet interface set-ups and traffic situations. A cycle accurate simulator has been developed and used for this purpose.