Alright Jiraiya is my man and has been stated by Itachi to be able to tie with Itachi and Kisame together. Why did he say this? For many reasons.
Itachi has Amaterasu.
Very powerful, but can be countered in ways that I have stated before.
Jiraiya can always create kage bunshin meat shields to be in Itachi's eyesight and to take the hit. He knows how amaterasu works in this fight so this could be one way for him to counter it.
Also he is very fast in sage mode which he could possibly elude Itachi's Eye sight if fast enough. However Itachi has good reactions so this could probably not work out. Itachi knows of amaterasu's draw backs, as well as all of the MSs draw backs so will use these techs sparingly as to not waste chakra. He knows of Jiraiya's chakra capacities so will not be so hasty to use these techs in the case that they wont work.
Itachi has intel on Jiraiya and knows how his SM works, so someone might say he will go for the toads. Easier said than done. HE might try to use amaterasu on them, however stated above meat shields can be used to constantly stay in front of jiraiya to make Itachi weary of using that. If he uses Tsukuyomi, Shima Fukasaku and Jiraiya are all connected like Bee and the Hachibi so using genjutsu is meaningless when the other can simply break them out of it.
On the topic of Jiraiya gaining SM in this fight. Jiraiya was able to fend off against multiple summons and the animal path pein to gain SM with Gamaken so It would be foolish to say he can't stall against just Itachi to gain SM. Jiraiya will gain SM in this fight, because without it he will certain die against Itachi.
Now how might Jiraiya counter Susanoo you might ask?
Many threads have shown that Jiraiya can just use the ground under Itachi to his advantage while in Susanoo. Swamp of the Underworld is the perfect jutsu to counter susanoo. Once used Itachi would have to abandon his post with Susanoo and then he would either A. Be caught by a jutsu such as Rasengan, Dragon flame bombs, Fukasaku's concentrated water beam, etc., or B. be caught by Jiraiya's raging art of the lion's mane or ma's tongue.
Also Ma and Pa's Genjutsu would probably not work on someone like Itachi so this fight is basically Ninjutsu/Taijutsu vs. Ninjutsu/Taijutsu.
Jiraiya has a tech for every situation, and Itachi's techs are extremely strong. However Itachi himself stated that every technique has a weakness and if you have a short amount of techs in your arsenal it can turn things around for the enemy in question.
Also on the topic of Susanoo, if Jiraiya were to use Sage art: Goemon then the ground would literally be turned into lava so Itachi would either A. Be burned up by the jutsu or B. Leave Susanoo and be caught off guard for Jiraiya. Itachi is a genius sure, but Jiraiya is extremely smart and experienced as well. He has 50+ years of experience under his belt and Itachi is just a genius. This fight goes to Jiraiya for me.
Jiraiya's Chakra reserves with Ma and Pa are nere limitless and Itachi has never been stated to have a large amount of Chakra, so spamming amaterasu, tsukuyomi, and Susanoo is out of the question.
