"Internal" license for group software? I have a question about the use and attribution of internal software tools.

We have a model in our group that is very popular and has formed the basis of many student projects and publications.  It was written about five years ago and has been published as a book chapter, but not a journal paper.  The model exists primarily as source code; there is no compiled version per se although there is a user interface tool that generates new source based on the template of the original model.  As a result, new work tends to involve a mix of the original code and further modifications as appropriate for the study in question.  

At the moment, we don't want to release the underlying model as open-source.  Is there an appropriate license that people would recommend to clarify these usage principles?  The original model author now has a looser affiliation with our university and so it may become difficult to ask his opinion on a case-by-case basis.
Software developed by multiple parties under university funding is implicitly covered by the copyright of the university.  The attitude towards intellectual property ownership varies by university, so you should search to find out your situation.  

A few universities are very liberal about intellectual property.  See https://uwaterloo.ca/research/waterloo-commercialization-office-watco/intellectual-property .  Other universities are more traditional, see http://www.research.utoronto.ca/faculty-and-staff/inventions-commercialization-and-entrepreneurship/invention-disclosure/ .  An invention leads towards a patent.  Software development (and publication) lead towards a copyright.  

From this point on, you might have to consult a lawyer, but here's some intuitions that may help (but could be wrong).  

Practically, if the source code has been published in a book, the copyright may have been transferred from the university to the publisher.  If the code was rewritten and then put under an open source license, with attribution to the original sources, this could be considered a new work.  With copyright, the analogy is relatively clear in the academic world.  It's okay to cite the source, or use snippets as "fair use", but copying the whole text outright would be plagiarism.  

If the university is not interested in commercializing the software, there may already be a process in place to have it reassigned under an open source license.  The MIT license may be the simplest to implement.  The Apache license and LGPL 2.1 licenses are also popular.