We present a neural model for the organization and neural dynamics of the medial pallium, the toad's homolog of mammalian hippocampus. A neural mechanism, called cumulative shrinking, is proposed for mapping temporal responses from the anterior thalamus into a form of population coding referenced by spatial positions. Synaptic plasticity is modeled as an interaction of two dynamic processes which simulates acquisition and both short-term and long-term forgetting. The structure of the medial pallium model plus the plasticity model allows us to provide an account of the neural mechanisms of habituation and dishabituation. Computer simulations demonstrate a remarkable match between the model performance and the original experimental data on which the dishabituation hierarchy was based. A set of model predictions is presented, concerning mechanisms of habituation and cellular organization of the medial pallium.