I have an edit button next to a text area but there is something I am not sure about.
Is the button position suitable? If not, where should it be ideally and how to position it there?
As was pointed out in a comment, I would revisit the idea of using a multiline text field instead. I'm sure you can find a way to watch for changes -- for example, on Android, there's a TextWatcher class you can use.
Another option is to make the field look like a text field, but open up a dialog when it is clicked.
If you still opt for an edit button, then you need to think about the layout of the form as a whole. Here, you don't provide enough context to work with, so it's impossible to say where a good place for an edit button might be. It's important that the button is 1) clearly associated with the field (usually done using positioning, by putting it close to the field), 2) large enough to be tappable, 3) discoverable, 4) unambiguous (sometimes, text works better than an icon).
I would have it break under the text area unless there are other form items that may be edited in this fashion. In which case having it flow in line like that is great. If this is a standalone text area then break it to the next line.