Researchers at the Institute of Computer Science and the Martinos Center for Biomedical Imaging at Harvard Medical School have identified a portion of the brain responsible for determining how far away a sound originates. They will help people with hearing impairment or other brain disorders.
https://blogs.scientificamerican.com/scicurious-brain/how-does-your-brain-hear-distance/
Kopco N, Huang S, Belliveau JW, Raij T, Tengshe C, Ahveninen J (2012). Neuronal Representations of Distance in Human Auditory Cortex. Proceedings of the National Academy of Sciences of USA, 109 (27), 11019-11024.