The damping term is an important component of the calculation model of the contact force of collision bodies because it simulates the energy dissipation of collision bodies during the contact-impact process. Therefore, an impact-damping model of a collision body with multi-point contact and external load is established by considering the restitution coefficient. The algorithm for solving this model is proposed based on iterative methods. Then, the accuracy of the established model is verified by the consistency between the calculated and tested results. The effect of multi-point contact and external load on the contact-impact process of the collision body is studied. The results show that the hysteresis damping factor increases from small to large when the collision body enters a stable state through repeated impacts. Further, the established damping model is applied to the dynamics model of a spur gear pair with backlash, extended teeth contact, and structure coupling effect of the gear body. The nonlinear dynamic characteristics, multi-state mesh, and teeth impact of the system are studied through the root-mean-square of transmission error, bifurcation diagrams with multi-mapping sections, and contact forces. The calculation results of the gear dynamics model with the impact-damping model are more consistent with the tested results than the calculation results of the gear dynamics model with the traditional damping model. Meanwhile, the connection between system resonance, response coexistence, teeth disengagement, and teeth impact is revealed.