Hi Chaitanya,
I do not think there is a way to implement peak detection using the instrumentation amplifier directly. The best way to do this would probably be to gain up the signal with the in amp, then apply a circuit for the peak detector after the amplification stage. The best solution would still be to use a dual supply on the in amp to avoid saturating the output at very low voltages. However, if you really want to look into a single-supply solution, you could take a look at the AD8227 or the AD8237 instead. We have a new tool found at this link that can help you check whether you would be working within the in amp's operating range.
For the peak detector circuit, you could use a circuit like the one in page 19 of the AD8034 datasheet. Will the output ultimately be digital though? If so, it might be cheaper to implement the peak detection in the software.
Also, out of curiousity, what sensor are you working with?
Thanks,
Kris