We are building a Intranet using alfresco on Managed servers. We are considering using a private lan to separate the database on to its own server which is only accessible via the main internet facing server, will this improve security against hack or any unorthorised access?
Your question as it is asked currently is kind of like asking "is a door secure ?". There is no real answer to that. If it's unlocked, it's useless. If it's a crappy lock, it's 90% useless and so on.
If the database server is in a VLAN on it's own, it's pretty much useless as it cannot communicate with anyone else. If it is in a routed VLAN then it's somewhat more useful.
Just placing a server in a separate VLAN gives you no extra security. Placing a server in a separate VLAN with IP/L4 filtering starts giving you a litte security. VLANs are just one tool amongst many that must cooperate to obtain the desired level of security.
Don't forget that in matters of security, the point of failure is almost always the weakest link. This means that if your server is badly configured, no amount of network security will secure it.
If your network currently does not have VLAN, I would suggest to put a software firewall on your DB server and secure the OS/SQL services.