This paper presents a novel holistic calibration method for stereo deflectometry system to improve the system measurement accuracy. The reconstruction result of stereo deflectometry is integrated with the calculated normal data of the measured surface. The calculation accuracy of the normal data is seriously influenced by the calibration accuracy of the geometrical relationship of the stereo deflectometry system. Conventional calibration approaches introduce form error to the system due to inaccurate imaging model and distortion elimination. The proposed calibration method compensates system distortion based on an iterative algorithm instead of the conventional distortion mathematical model. The initial value of the system parameters are calculated from the fringe patterns displayed on the systemic LCD screen through a reflection of a markless flat mirror. An iterative algorithm is proposed to compensate system distortion and optimize camera imaging parameters and system geometrical relation parameters based on a cost function. Both simulation work and experimental results show the proposed calibration method can significantly improve the calibration and measurement accuracy of a stereo deflectometry. The PV (peak value) of measurement error of a flat mirror can be reduced to 69.7 nm by applying the proposed method from 282 nm obtained with the conventional calibration approach.