Boussinesq equations describing motions of internal waves in a two-fluid system with the presence of free surface are theoretically derived, and the associated essential properties are examined in this study. Eliminating the dependence on the vertical coordinate from all variables, four equations constitute the Boussinesq model with two flexible parameters, z u and z l, which indicate the specific elevations, respectively, in the upper and lower fluids. Similar to the Boussinesq model for a single-layer fluid, z u and z l are determined by matching the linear dispersion relation with Lamb's solution. This determines the optimal model. In the analysis stage, this problem is classified into two cases, the thicker-upper-layer case and the thicker-lower-case case, to avoid the possible divergence of wave properties as the thickness ratio grows. Since there exist two modes of motions that may be excited, cases of both modes are separately analyzed. Linear characteristics including the amplitude ratios and normalized particle velocities are analyzed. Second-order harmonic waves are examined to validate nonlinear behaviors of present model. Results of linear and nonlinear investigations show that the present model indeed extends the applicable range of traditional Boussinesq equations.