Polarization control is of vital importance in two-axis Lloyd's mirror interference lithography to achieve the preferred interference fringes. In this work, we first establish a three-dimensional polarization ray-tracing model to trace the evolution of polarization states of incident beams through the corner-cube-like interferometer unit of an orthogonal two-axis Lloyd's mirror interferometer. With the established model, we then derive the optimal combination of initial polarization directions of the incident beams according to the orthogonality of polarization states and the contrast of interference fringes. The comparison between the simulated and experimental interference fringes obtained under different combinations of initial polarization states of incident beams verify the feasibility of the established model and the achieved optimal polarization modulation.