The Miyata-Choi-Camassa (MCC) system of equations describing long internal nonhydrostatic and nonlinear waves at the interface between two layers of inviscid fluids of different densities bounded by top and bottom walls is mathematically ill-posed despite the fact that physically stable internal waves are observed matching closely those of MCC. A regularization to the MCC equations that yields a computationally simple well-posed system for time-dependent evolution is proposed here. The regularization is accomplished by keeping the full hyperbolic part of MCC and exchanging spatial and temporal derivatives in one of the linearized dispersive terms. Solitary waves of MCC over a wide range of parameters are used as a benchmark to check the accuracy of the model. Our model includes the possibility of a background shear, and we show that, contrary to the no shear case, solitary waves can cross the midlevel between the top and the bottom walls and may have different polarity from the case with no background shear. Time-dependent solutions of the regularization stable model are presented, including interactions of its solitary waves, and classical and modified Korteweg-de Vries equations for small amplitude waves with the inclusion of background shear are derived. Throughout the paper, the Boussinesq approximation is taken, although the results can be extended to the non-Boussinesq case.