We explore and develop a Proper Orthogonal Decomposition (POD)-based deflation method for the solution of ill-conditioned linear systems, appearing in simulations of two-phase flow through highly heterogeneous porous media. We accelerate the convergence of a Preconditioned Conjugate Gradient (PCG) method achieving speed-ups of factors up to five. The up-front extra computational cost of the proposed method depends on the number of deflation vectors. The POD-based deflation method is tested for a particular problem and linear solver; nevertheless, it can be applied to various transient problems, and combined with multiple solvers, e.g., Krylov subspace and multigrid methods.