The two-photon polarization spectroscopy (TPPS) of 87Rb atoms is reported based on the 5S1/2-5P3/2-4D5/2 ladder-type atomic system. Compared with other transitions, the cycling transition shows much better signal-to-noise ratio. TPPS cycling transition signal versus intensity of the pumping laser is investigatived. The frequency of a 1529 nm laser diode is stabilized to the 5P3/2(F′=3)-4D5/2(F″=4) hyperfine transition of 87Rb atoms by using TPPS. The minimum value of Allan variance σy(τ) is 1.3×10-11 at the interrogation time τ of 100 s. Compared with the free-running case, this new method remarkably improves the long-term frequency stability of the 1529 nm laser.