We develop a microscopic biophysical model for self-organization and reshaping of artificial tissue, that is co-driven by microscopic active forces between cells and extracellular matrix (ECM), and macroscopic forces that develop within the tissue, finding close agreement with experiment. Microscopic active forces are stimulated by $mu$m scale interactions between cells and the ECM within which they exist, and when large numbers of cells act together these forces drive, and are affected by, macroscopic-scale self-organization and reshaping of tissues in a feedback loop. To understand this loop, there is a need to: (1) construct microscopic biophysical models that can simulate these processes for the very large number of cells found in tissues; (2) validate and calibrate those models against experimental data; and (3) understand the active feedback between cells and the extracellular matrix, and its relationship to macroscopic self-organization and reshaping of tissue. Our microscopic biophysical model consists of a contractile network representing the ECM, that interacts with a large number of cells via dipole forces, to describe macroscopic self-organization and reshaping of tissue. We solve the model using simulated annealing, finding close agreement with experiments on artificial neural tissue. We discuss calibration of model parameters. We conclude that feedback between microscopic cell-ECM dipole interactions and tissue-scale forces, is a key factor in driving macroscopic self-organization and reshaping of tissue. We discuss application of the biophysical model to simulation and rational design of artificial tissues.