Improve sightreading the way you would improve anything else - by practicing it.
That said, here are some tips that might help you (I'm a pretty good sight-reader or so my teacher tells me

):
1. Look at the key/time signatures before you start, also the tempo marking.
2. Glance over the piece and look for changes in the the key, time, or tempo, as well as looking for any parts that appear particularly difficult.
3. Try to keep your eyes reading a couple measures ahead so your hands know what to expect!
4. If you want to be able to sightread, it's pretty much imperative that you be able to play reasonably well without looking at your hands...

5. As you practice more, you will start recognizing patterns and chord shapes and so on.
6. Whatever you do, make sure that you bring out the melody and don't overpedal.
It's okay to miss the odd note as long as the general impression comes across. It helps if you're good at recognizing different harmonies because then even if you don't play the exact right note, you still have a chance of hitting something that at least sounds okay! The hardest stuff for me is when the music is really fast, has really complex rhythyms, or chords with millions of accidentals on top of a 5# key signature...

Anyways, I hope these ideas help!