One small problem with peace diplomacy in the old Civ games, and in many other games for that matter, is that the victor always gets to keep all conquered land.

What I propose is that peace is negotiated and during these negotiations the victor proposes a suggestion which the defeated Civ may agree to or suggest a counter offering. Often the victor is not at all interested in taking control of more than one or two cities because of the difficulties of keeping and the economic problems of rebuilding a ravaged land after a war.
Often a war might end in a stalemate were both side has depleted most of its economy, then during peace talks you might have to relinquish control of some cities or the war will just drag on forever. The loosing side should not very easily accept peace until totally beaten, which might result in you overextending your abilities in fighting your enemies and you must offer some of the conquered cities back to get a peace agreement.

To fix some of this, conquered cities should be quite worthless economically and where rebellion and uprising could be common until a peace agreement is signed. This would make war more of a risky business, faster and more brutal, where you try to break your opponent quickly and then manage to sign a favorable peace agreement.

All the Paradox games already propose this concept (which, as a sad side-effect, tends to make nearly all other games look like dumbed down Risk when it comes to conquests).

When you conquer a part of the ennemy's territory, it's "occupied". You can't build anything in it, nor change it in any way, but neither can your foe.
The number of battles you won and the number of territories you are occupying, gives you victory points, while having territories occupied and losing battles, make you lose victory points.

Once you decide to make peace, you are presented with a list of what you can propose (annexing such territory, giving such one, vassalizing the ennemy, paying/receiving tribute, etc...). Each option has a certain price in victory point, so the more you've crushed the enemy, the more you can ask in the peace treaty (which seems logical).

Once a peace treaty is accepted (be it a white peace, if both of you are exhausted, or a beneficial or unbeneficial treaty depending on how the war was going), all the occupied territories are immediately given back to their legitimate owner, except for the annexed ones included in the peace treaty, which go under the full control of their new owner. But they are marked as "core province" (or "claimed province") for their previous owner, which means that they would cost less to ask back in a potential new peace treaty, later.

A very good, realistic and not very complex system. I never understood why it wasn't copied more by others.