Experts say the presence of cobbled surfaces and Medieval pottery found in the Burgage area of Southwell suggests the presence a community that possibly dates from before the Norman conquest.
Archaeologist Matt Beresford said the work was ongoing and they hoped to find more conclusive evidence.
The dig was backed by a £5,800 Heritage Lottery grant.
The project was initiated by the Southwell Community Archaeology Group.
John Lock, chairman, said: "We think we have found a whole village within Southwell.
"It points to a suggestion that the early occupation of Southwell took place near the river.
"It's very important for understanding the development of the town."
The group believes the site had a village green, surrounded by cottages, smallholdings and a medieval chapel at the top.
Mr Beresford added: "Seven of our nine test pits on the small part of the green had this surface, and medieval pottery dating to 1100 through to early 1200s was found within the surface itself, giving us a nice date for our site of just after the Norman conquest and through into the 1300s.
"We have also had a couple of prehistoric flint tools from the site, which it seems are the first found in Southwell. This suggests habitation in the region much earlier than we previously knew."
BBC News. 2013. “Traces of 'lost village' found in Nottinghamshire”. BBC News. Posted: July 27, 2013. Available online: http://www.bbc.co.uk/news/uk-england-nottinghamshire-23466839