In a guitar pedal, a preamp gives you more gain- easier to get some crunch.
A preamp can be at any level, short of a power amplifier that actually drives the loudspeaker. All guitar amps have preamps built into them. The signal from the guitar is fairly weak and can't drive the power amplifier directly- you would hardly hear anything at all. The preamp provides the missing gain, and in a guitar amp is what you are adjusting with the volume and tone controls.