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Shadows exist universally in sunlight-source remotely sensed images, and can interfere with the spectral morphological features of green vegetations, resulting in imprecise mathematical algorithms for vegetation monitoring and physiological diagnoses; therefore, research on shadows resulting from forest canopy internal composition is very important. Red edge is an ideal indicator for green vegetation’s photosynthesis and biomass because of its strong connection with physicochemical parameters. In this study, red edge parameters (curve slope and reflectance) and the normalized difference vegetation index (NDVI) of two species of coniferous trees in Inner Mongolia, China, were studied using an unmanned aerial vehicle’s hyperspectral visible-to-near-infrared images. Positive correlations between vegetation red edge slope and reflectance with different illuminated/shaded canopy proportions were obtained, with all R2s beyond 0.850 (p < 0.01). NDVI values performed steadily under changes of canopy shadow proportions. Therefore, we devised a new vegetation index named normalized difference canopy shadow index (NDCSI) using red edge’s reflectance and the NDVI. Positive correlations (R2 = 0.886, p < 0.01) between measured brightness values and NDCSI of validation samples indicated that NDCSI could differentiate illumination/shadow circumstances of a vegetation canopy quantitatively. Combined with the bare soil index (BSI), NDCSI was applied for linear spectral mixture analysis (LSMA) using Sentinel-2 multispectral imaging. Positive correlations (R2 = 0.827, p < 0.01) between measured brightness values and fractional illuminated vegetation cover (FIVC) demonstrate the capacity of NDCSI to accurately calculate the fractional cover of illuminated/shaded vegetation, which can be utilized to calculate and extract the illuminated vegetation canopy from satellite images.