This article presents a smart meter based two-layer state estimation technique, design to enable integrated monitoring of medium-voltage (MV) and low-voltage (LV) power distribution networks. The main contributions of this work include the development of a novel topology reduction technique for LV networks in order to carry out state estimation with a reduced number of smart meter based measurements, and a linear LV state estimation technique, which reduces convergence problems in LV networks. In addition, a detailed framework for integrated MV/LV network state estimation in realistic, unbalanced three-phase networks is proposed and demonstrated using the IEEE 13 bus and IEEE 906 LV networks. The results suggest that the proposed two-layer state estimation technique is robust and provides improved distribution system state estimation accuracy compared to traditional approaches.