you could use the same database, but just change the prefix. This would of course require you to copy the entire database (all tables) with prefix change into the same database.
I don't suggest that though. It would be easier (and safer so you don't mess with production) to download a copy of the database sql and upload this into a new database all together. This keeps files separate as well if you make any changes as part of the update. Then there is less chance of messing up production, plus when you're ready to go live you keep dev and live separate. These are all good things.
Here's what I would do:
create a subdomain for your site. if your site is www.example.com. make it dev.example.com
Copy your entire www directory into the subdomain directory that you created when you created the subdomain. (www/dev for example)
Now create a new database (you can use the same user so pw will stay the same).
in your dev directory in wp-config.php change the line for your dbname to the new database you just created. If you gave the same user permissions on this database you won't have to change dbuser or dbpw.
Make sure you've copied the database content from one database to the next. Easiest way to do this is phpmyadmin. Open the original database and at the top choose export. save as SQL. Now open the new database in phpmyadmin and at the top choose import. Find the sql file you just downloaded from the original live site and upload it here.
Now go get this tool:
Upload into your www/dev folder. (i usually rename the search and replace folder to SRDB.)
now navigate to dev.example.com/SRDB and the top two lines you'll see a search field and a replace field. in the search place your live site address:
in the replace field place your dev url:
hit live live run. ONLY do this after ensuring your on your dev url and that it's loaded into your dev database.
After this runs it's course, you'll have successfully backed up your site, database and have a functioning dev site to mess with that won't mess with your live site.
As a side note. If you can avoid running live and dev on the same server, i usually recommend that just to avoid confusion and to note that if you have any backup programs running on your live site it may include the new dev folder in the backup if you don't exclude it from the back up.