Atomistic molecular dynamics simulation of an aqueous solution of the small protein HP-36 has been carried out with explicit solvent at room temperature. Efforts have been made to explore the influence of the protein on the relative packing and ordering of water molecules around its secondary structures, namely, three α-helices. The calculations reveal that the inhomogeneous water ordering and density distributions around the helices are correlated with their relative hydrophobicity. Importantly, we have identified the existence of a narrow relatively dehydrated region containing randomly organized "quasi-free" water molecules beyond the first layer of "bound" waters at the protein surface. These water molecules with relatively weaker binding energies form the transition state separating the "bound" and "free" water molecules at the interface. Further, increased contribution of solid-like caging motions of water molecules around the protein is found to be responsible for reduced fluidity of the hydration layer. Interestingly, we notice that the hydration layer of helix-3 is more fluidic with relatively higher entropy as compared to the hydration layers of the other two helical segments. Such characteristics of helix-3 hydration layer correlate well with the activity of HP-36, as helix-3 contains the active site of the protein.