The structure and function of vegetation regulate fluxes across the biosphere-atmosphere interface with large effects in water-limited ecosystems. Vegetation dynamics are often neglected in hydrological modeling except for simple prescriptions of seasonal phenology. However, changes in vegetation densities, influencing the partitioning of incoming solar energy into sensible and latent heat fluxes, can result in long-term changes in both local and global climates with resulting feedbacks on vegetation growth. This paper seeks a simple vegetation dynamics model (VDM) for simulation of the leaf area index (LAI) dynamics in hydrologic models. Five variants of a VDM are employed, with a range of model complexities. The VDMs are coupled to a land surface model (LSM), with the VDM providing the LAI evolution through time and the LSM using this to compute the land surface fluxes and update the soil water contents. We explore the models through case studies of water-limited grass fields in California (United States) and North Carolina (United States). Results show that a simple VDM, simulating only the living aboveground green biomass (i.e., with low parameterization), is able to accurately simulate the LAI. Results also highlight the importance of including the VDM in the LSM when studying the climate-soil-vegetation interactions over moderate to long timescales. The inclusion of the VDM in the LSM is demonstrated to be essential for assessing the impact of interannual rainfall variability on the water budget of a water limited region.