The potential of demand side as a frequency reserve proposes interesting opportunity in handling imbalances due to intermittent renewable energy sources. This paper proposes a novel approach for computing the parameters of a stochastic battery model representing the aggregation of Thermostatically Controlled Loads (TCLs). A hysteresis based non-disruptive control is used using priority stack algorithm to track the reference regulation signal. The parameters of admissible ramp-rate and the charge limits of the battery are dynamically calculated using the information from TCLs that is the status (on/off), availability and relative temperature distance till the switching boundary. The approach builds on and improves on the existing research work by providing a straight-forward mechanism for calculation of stochastic parameters of equivalent battery model. The effectiveness of proposed approach is demonstrated by a test case having a large number of residential TCLs tracking a scaled down real frequency regulation signal.