In one aspect, a system for monitoring the displacement of a ground engaging tool of an agricultural implement. A controller of the system may be configured to monitor a magnitude of a displacement defined between a current position of a ground engaging tool of the implement and a predetermined ground engaging tool position. The controller may also be configured to initiate a first control action when it is determined that the magnitude of the displacement of the ground engaging tool exceeds a first threshold displacement value. Moreover, the controller may further be configured to initiate a second control action when it is determined that the magnitude of the displacement of the ground engaging tool exceeds a second threshold displacement value, with the second threshold displacement value corresponding to a greater displacement relative to the predetermined ground engaging tool position than the first displacement threshold value.