Recent discussion of hydrologic representation in Earth System Modeling has identified resolving lateral groundwater flow at Earth-system-relevant spatial resolution as a primary obstacle. The challenges reside with the multiple spatiotemporal scales across which groundwater flow occurs: Bucket-type land surface models which ignore between-cell lateral transfer works only when most groundwater discharge occurs within its gridcell. In contrast, physically-based models can well resolve regional lateral flow, but they require sufficient resolution to capture local spatial gradients. It is difficult to account for subgrid-scale heterogeneities, e.g., hills whose entire width is comparable to the grid size. Here we propose and test a novel subgrid-scale parameterization scheme for local groundwater exfiltration. This method pre-computes several level-set functions from terrain and relates them and their convolutions to local exfiltration computed from fine-resolution 3D simulations. With the help of this scheme, local groundwater exfiltration can be dynamically simulated with an explicit formula for coarse gridcells, while inter-grid large-scale groundwater flow can be modeled using a simplistic static approach. This method may provide aid to current development of large-scale hydrologic models.