To enable large number of antennas in massive multi-input multi-output (MIMO) systems, demodulation reference signal (DM-RS) has been widely used for accurate channel estimation in mobile systems. As DM-RS and data symbols go through the same precoding matrix before sent to channel, channel estimation based on DM-RS is actually conducted with respect to an equivalent channel, which is a combination of the precoding matrix and the physical channel. As a consequence, channel estimation has to be conducted within the frequency range of one precoding resource group (PRG), because a different precoding matrix may be used for neighbouring PRGs. In this paper, by observing that the channel frequency responses in different PRGs can share the same bases, a Karhunen-Loève Transform (KLT) based channel estimation approach is proposed. Using this approach, received signals from adjacent PRGs can be exploited to improve the quality of channel estimation for the PRG of interest. Simulation results show that the channel estimation mean square error (MSE) of our method is better than that of the Toeplitz correction by more than 3dB. Moreover, by adopting this novel channel estimation approach, the performance of symbol error ratio (SER) is close that using ideal channel estimation results.