diff --git a/internal/backend/workloadproxy/handler.go b/internal/backend/workloadproxy/handler.go
index 11260584..40995749 100644
--- a/internal/backend/workloadproxy/handler.go
+++ b/internal/backend/workloadproxy/handler.go
@@ -174,7 +174,7 @@ func (h *HTTPHandler) parseServiceAliasFromHost(request *http.Request) string {
 		return ""
 	}
 
-	if isNewFormat := len(proxyServiceHostPrefixParts) == 2; isNewFormat {
+	if isNewFormat := proxyServiceHostPrefixParts[0] != LegacyHostPrefix; isNewFormat {
 		return proxyServiceHostPrefixParts[0]
 	}
 
diff --git a/internal/backend/workloadproxy/handler_test.go b/internal/backend/workloadproxy/handler_test.go
index 9dcff5a4..72026012 100644
--- a/internal/backend/workloadproxy/handler_test.go
+++ b/internal/backend/workloadproxy/handler_test.go
@@ -127,6 +127,18 @@ func TestHandler(t *testing.T) {
 	t.Run("subdomain request with cookies", func(t *testing.T) {
 		t.Parallel()
 
+		testSubdomainRequestWithCookies(ctx, t, mainURL, "instanceid")
+	})
+
+	t.Run("subdomain request with cookies - dash in instance name", func(t *testing.T) {
+		t.Parallel()
+
+		testSubdomainRequestWithCookies(ctx, t, mainURL, "instance-id")
+	})
+
+	t.Run("subdomain request with cookies - legacy format", func(t *testing.T) {
+		t.Parallel()
+
 		next := &mockHandler{}
 		proxyProvider := &mockProxyProvider{}
 		accessValidator := &mockAccessValidator{}
@@ -139,7 +151,7 @@ func TestHandler(t *testing.T) {
 
 		testServiceAlias := "testsvc2"
 
-		req, err := http.NewRequestWithContext(ctx, http.MethodGet, fmt.Sprintf("https://%s-instanceid.proxy-us.example.com/example", testServiceAlias), nil)
+		req, err := http.NewRequestWithContext(ctx, http.MethodGet, fmt.Sprintf("https://%s-%s-instanceid.example.com/example", workloadproxy.LegacyHostPrefix, testServiceAlias), nil)
 		require.NoError(t, err)
 
 		testPublicKeyID := "test-public-key-id"
@@ -158,39 +170,37 @@ func TestHandler(t *testing.T) {
 		require.Equal(t, []string{testPublicKeyIDSignatureBase64}, accessValidator.publicKeyIDSignatureBase64s)
 		require.Equal(t, []resource.ID{"test-cluster"}, accessValidator.clusterIDs)
 	})
+}
 
-	t.Run("subdomain request with cookies - legacy format", func(t *testing.T) {
-		t.Parallel()
-
-		next := &mockHandler{}
-		proxyProvider := &mockProxyProvider{}
-		accessValidator := &mockAccessValidator{}
-		logger := zaptest.NewLogger(t)
+func testSubdomainRequestWithCookies(ctx context.Context, t *testing.T, mainURL *url.URL, instanceID string) {
+	next := &mockHandler{}
+	proxyProvider := &mockProxyProvider{}
+	accessValidator := &mockAccessValidator{}
+	logger := zaptest.NewLogger(t)
 
-		handler, err := workloadproxy.NewHTTPHandler(next, proxyProvider, accessValidator, mainURL, "proxy-us", logger)
-		require.NoError(t, err)
+	handler, err := workloadproxy.NewHTTPHandler(next, proxyProvider, accessValidator, mainURL, "proxy-us", logger)
+	require.NoError(t, err)
 
-		rr := httptest.NewRecorder()
+	rr := httptest.NewRecorder()
 
-		testServiceAlias := "testsvc2"
+	testServiceAlias := "testsvc2"
 
-		req, err := http.NewRequestWithContext(ctx, http.MethodGet, fmt.Sprintf("https://%s-%s-instanceid.example.com/example", workloadproxy.LegacyHostPrefix, testServiceAlias), nil)
-		require.NoError(t, err)
+	req, err := http.NewRequestWithContext(ctx, http.MethodGet, fmt.Sprintf("https://%s-%s.proxy-us.example.com/example", testServiceAlias, instanceID), nil)
+	require.NoError(t, err)
 
-		testPublicKeyID := "test-public-key-id"
-		testPublicKeyIDSignatureBase64 := base64.StdEncoding.EncodeToString([]byte("test-signed-public-key-id"))
+	testPublicKeyID := "test-public-key-id"
+	testPublicKeyIDSignatureBase64 := base64.StdEncoding.EncodeToString([]byte("test-signed-public-key-id"))
 
-		req.AddCookie(&http.Cookie{Name: workloadproxy.PublicKeyIDCookie, Value: testPublicKeyID})
-		req.AddCookie(&http.Cookie{Name: workloadproxy.PublicKeyIDSignatureBase64Cookie, Value: testPublicKeyIDSignatureBase64})
+	req.AddCookie(&http.Cookie{Name: workloadproxy.PublicKeyIDCookie, Value: testPublicKeyID})
+	req.AddCookie(&http.Cookie{Name: workloadproxy.PublicKeyIDSignatureBase64Cookie, Value: testPublicKeyIDSignatureBase64})
 
-		handler.ServeHTTP(rr, req)
+	handler.ServeHTTP(rr, req)
 
-		require.Equal(t, []string{testServiceAlias}, proxyProvider.aliases)
+	require.Equal(t, []string{testServiceAlias}, proxyProvider.aliases)
 
-		require.Equal(t, http.StatusOK, rr.Code)
+	require.Equal(t, http.StatusOK, rr.Code)
 
-		require.Equal(t, []string{testPublicKeyID}, accessValidator.publicKeyIDs)
-		require.Equal(t, []string{testPublicKeyIDSignatureBase64}, accessValidator.publicKeyIDSignatureBase64s)
-		require.Equal(t, []resource.ID{"test-cluster"}, accessValidator.clusterIDs)
-	})
+	require.Equal(t, []string{testPublicKeyID}, accessValidator.publicKeyIDs)
+	require.Equal(t, []string{testPublicKeyIDSignatureBase64}, accessValidator.publicKeyIDSignatureBase64s)
+	require.Equal(t, []resource.ID{"test-cluster"}, accessValidator.clusterIDs)
 }