The development of accurate statistical mechanics models of molecular liquid systems is a problem of great practical and fundamental importance. Site-density functional theory (SDFT) is one of the promising directions in this area, but its success hinges upon the ability to efficiently reconcile the co-existence of two distinct intra- and inter-molecular interaction regimes in a molecular liquid. The renormalized formulation of SDFT (RSDFT), which we have recently developed, resolves this problem by introducing an additional potential field variable that decouples two interaction scales and maps the molecular liquid problem onto the effective simple liquid mixture. This work provides a critical assessment of RSDFT for the hydrated ion system-a problem that historically has always been one of the most difficult cases for SDFT applications. Using a two-site model of water, we perform a comprehensive analysis of hydrated alkali metal and halogen ions, including both structural and free energy based characteristics. The results indicate that RSDFT provides a significant improvement over conventional three-dimensional reference interaction site model implementations and may prove useful in coarse grained simulations based on two-site solvent models.