A dynamic calibration method for calibrating a trailer angle detection system of a vehicle towing a trailer includes providing cameras configured to be disposed at the vehicle so as to have respective fields of view. Image data captured by at least some of the cameras is processed as the vehicle is driven forwardly and towing the trailer. A location of a portion of the trailer is determined via processing of captured image data. Responsive at least in part to processing of captured image data, a plurality of trailer parameters and vehicle-trailer interface parameters are determined. The plurality of trailer parameters and vehicle-trailer interface parameters are determined while the vehicle is driven forwardly and towing the trailer. The trailer angle detection system of the vehicle is calibrated responsive to determination that the trailer portion is not where the system expects it to be when the vehicle is traveling straight forward.