A novel polarization modulation method is proposed, for a possible application in the measurement of the electron density and magnetic field profiles by an interferometer-polarimeter diagnostic in the Divertor Test Tokamak (DTT) device. Starting from the output of a CO2 pumped CHCOH3 far-infrared (FIR) laser (λ = 118.8 μm), three waves with frequencies ω, ω − δω, and ω + δω are generated and coherently combined to produce a polarization modulated laser beam suitable to probe the DTT plasma in a multichord, double-pass scheme. A second, coherently pumped, FIR cavity operating at the slightly detuned ω' frequency, acts as a local oscillator for the interferometric measurement. By this polarization modulation method, it is possible to simultaneously measure the interferometric phase, the Faraday rotation angle, and the Cotton-Mouton effect, all by a single detector, while keeping to an acceptable value the perturbation of the interferometric phase due to the time modulated polarization. In this paper, we describe the principles of the method and discuss its possible application in the poloidal interferometer-polarimeter diagnostic of the DTT device. A single chord mock-up experiment is in preparation to experimentally test the technique.