Orthogonal Time Frequency Space (OTFS) systems face significant challenges in channel estimation due to high pilot overhead and peak-to-average power ratio (PAPR). To address these issues, we propose a two-step channel estimation method for Zero-Pad OTFS (ZP-OTFS), a modified OTFS system characterized by multiple zero rows along the delay axis. This method strategically inserts pilot sequences into the zero bins of the ZP-OTFS system, effectively mitigating overhead and PAPR. Comprehensive simulation results validate the effectiveness of our proposed method, demonstrating its superior performance over traditional embedded pilot estimation in high Signal-to-Noise Ratio (SNR) scenarios. Specifically, our method achieves a lower normalized mean square error (NMSE) and better bit error rates (BER) at high SNRs.