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This paper discusses a predator-prey model with prey refuge. We investigate the role of prey refuge on the existence and stability of the positive equilibrium. The global asymptotic stability of positive interior equilibrium solution is established using suitable Lyapunov functional, which shows that the prey refuge has no influence on the permanence property of the system. Mathematically, we analyze the effect of increase or decrease of prey reserve on the equilibrium states of prey and predator species. To access the usability of proposed predator-prey model in practical scenarios, we also suggest, the use of Levenberg-Marquardt (LM) method for associated parameter estimation problem. Numerical results demonstrate faithful reconstruction of system dynamics by estimated parameter by LM method. The analytical results found in this paper are illustrated with the help of suitable numerical examples