The Peace of Prague abolished the German federation and created the North German Federation, which was dominated by Prussia, which could hardly be seen as encouraging unification. The other terms of the treaty meant that a large section of Germany as Schleswig-Holstein, Hanover, Hesse-cassel, Frankfurt, and Nassau were all annexed by Prussia. The agreement also stated that the smaller southern states of Bavaria, Baden, Wurttemburg, and Hesse-Darmstadt should all remain independent. .
The final Peace of Prague was signed in August 1866, which was at a time when Prussia and Bismarck were in a position to dictate the terms and it achieved almost all of Bismarck's immediate objects and this didn't include the unification of Germany.
Bismarck wanted to annex all the smaller states because it made Prussia stronger and larger than Austria, but by him doing this he also made the eventual unification of Germany easier.
Once the Peace of Prague had been signed there was a decisive shift in power in Europe in favour of Prussia, which was what Bismarck had wanted but not for the reasons of German unification. .
This shift in power caused Napoleon of France to become agitated and demanded extra territory for France and Bismarck used these demands to pressurise the south German states into signing secret military alliances with the north German confederation. These alliances effectively started military integration with the north before political unification was achieved, but it did bring about some sort of unification. The alliances said that the smaller southern states would come to the aid of Prussia if she was attacked and this agreement was advantageous to both sides. It gave Prussia a hold over another piece of territory and it gave the smaller states the security of being annexed with a major power like Prussia.
The fact that the smaller states would come to the aide of Prussia if she were attacked shows that Bismarck was aware that war with Napoleon and his French army was inevitable and this means that everything Bismarck does after this is done with a mind to win the war.