We present a new method for high precision measurements of polarization rotation in the frequency range from 0.2 to 2.2 THz using a fiber coupled time-domain THz spectrometer. A free standing wire-grid polarizer splits THz light into orthogonal components that are then measured by two separate detectors simultaneously. We theoretically model the uncertainties introduced by optical component non-idealities and predict that we may expect to achieve accuracies of 0.8% when anti-symmetrizing the response with respect to an applied field. Anti-symmetrization improves accuracy by more than four orders of magnitude. We demonstrate this method on a 2D electron gas in magnetic field and show that we achieve a precision of 20 μrad (1.1 mdeg) for small polarization rotation angles. A detailed description of the technique and data analysis procedure is provided, demonstrating its capability to precisely measure polarization states in the 0.2 to 2.2 THz range.