Water is a highly polar solvent. As a result, electrostatic interactions of interfacial water molecules play a dominant role in determining the distribution of ions in electric double layers (EDLs). Near a surface, an inhomogeneous and anisotropic arrangement of water molecules gives rise to pronounced variations in the electrostatic and hydration energies of ions. Therefore, a detailed description of the structural and dielectric properties of water is important to study EDLs. However, most theoretical models ignore the molecular effects of water and treat water as a background continuum with a uniform dielectric permittivity. Explicit consideration of water polarization and hydration of ions is both theoretically and numerically challenging. In this work, we present an empirical potential-based quasi-continuum theory (EQT) for EDL, which incorporates the polarization and hydration effects of water explicitly. In EQT, water molecules are modeled as Langevin point dipoles and a point dipole based coarse-grained model for water is developed systematically. The space dependence of the dielectric permittivity of water is included in the Poisson equation to compute the electrostatic potential. In addition, to reproduce hydration of ions, ion-water coarse-grained potentials are developed. We demonstrate the EQT framework for EDL by simulating NaCl aqueous electrolyte confined inside slit-like capacitor channels at various ion concentrations and surface charge densities. We show that the ion and water density predictions from EQT agree well with the reference molecular dynamics simulations.