We present a method to measure quadratic Terahertz optical nonlinearities in Terahertz time-domain spectroscopy. We use a rotating linear polarizer (a polarizing chopper) to modulate the amplitude of the incident THz pulse train. We use a phase-sensitive lock-in detection at the fundamental and the second harmonic of the modulation frequency to separate the materials responses that are linear and quadratic in Terahertz electric field. We demonstrate this method by measuring the quadratic Terahertz Kerr effect in the presence of the much stronger linear electro-optic effect in the (110) GaP crystal. We propose that the method can be used to detect Terahertz second harmonic generation in noncentrosymmetric media in time-domain spectroscopy, with broad potential applications in nonlinear Terahertz photonics and related technology.