Will Moodle run on an intranet?
While the answer Mary gave is 100% correct (yes, moodle can run on an intranet), a quick peek at your profile shows an edu so there might be a little more than was asked!
'SoS', Ken
An intranet is a company's secure private local network that is not meant to be accessed by anyone outside the company.
Coming back to your question, you can install Moodle in your laptop, when it is connected to the Internet so that it will serve as a Moodle server once connected to the LAN. The MoodleBox is an example of a small but complete Moodle server made for such purposes.
Yes ... can be run in that environment ... I imagine with some networking and Moodle module (tools) restrictions.
Following is unsolicited ... but ...
Much depends upon administration of this correctional facility and those that would be using it - purpose ... GED? Training for employment? College credits? etc. Who would be instructors/teachers?
Server itself would need inside out access to moodle repo (strongly recommend git) for acquistion of core updates/upgrades (restricted ssh access). Since admin of a Moodle can't be done 100% in Moodle Admin interface a cPanel like service might be required.
And a technical thang ... how many participants at one time accessing?
Other considerations am sure ...
Experience with similar ... large ISD with what was called a 'Reassignment Campus' consisting of students from 3 High Schools and 4 Junior HS's. LDAP.
'SoS', Ken