I'm suer Jiraya would win hands on.
Some people said that Itachi would not allow him to go into Sage mode, but if you think about it you'd remember that when he fought Pain he transformed into Sage mode in a blink of an eye just when he was attacked by the rino summoned by Pain, and don't forget that Jiraya's Sage Mode is permanent thanks to Fukasaku and Ma.
The thing is that Jiraya is someone that would've kicked Danzo's ass easily, and Danzo, in one single fight, took little sasuke to the point where he went blind because of overusing the Mangekyu, and I must say that Sasuke's mangekyu is stronger than Itachi's.
My point here is that the Mangekyu is not as great as we all believed it would be; Let's take a look at the past, when Itachi used Aamateratsu on Sasuke, Sasuke was able to dodge it several times during the fight, and I'm sure that Jiraya's speed during Sage mode is a lot faster than the one Sasuke would reach at any point.
Sage mode not only increases speed, it also brings with it a huge power up for it's user, it allows its user to become the greatest sensor ninja there could exist (well, Naruto surpassed this when he dominated the kyubi), it gives its user a huge resistace to attacks too.
Let's look at Itachi's weapons and their effect on Jiraya Sage Mode:
* Tsukiyomi: It's a great illusion but it's one that was broken by Sasuke, confirming what Jiraya taught Naruto when he was a child; Jiraya said "that if the victim of the illusion has a greater chakra that it's attacker he would be able to concentrate and release it's chakra in a blow to break the illusion". That's what Sasuke did by releasing hes second level of the cursed seal, and my friends, Sage mode concentrates much more chakra than that seal, which means that Jiraya would break Tsukiyomi rapidly.
* Amateratsu:Sasuke dodged it so I'm sure that sage mode would also dodge it with much less effort into it.
* Susano: We saw how little sasuke went blind by using it for, let's say, one hour (that's what his fight with Danzo and the Raikage must have lasted), and being fair we must admit that Sasuke's Susano is way stronger than Itachi's because of his capability to mix it with amateratsu and to launch long distance attacks. Itachi's Susano is a short range weapon so Jiraya would just keep his distance for a while, jus until Itachi goes blind, and while he's in sage mode he can sence the exact position of Itachi so that if he tries to run away Jiraya would locate him easily and take him down with one huge rasengan.
My friends, I'm bsolutely sure that Jiraya would crush Itachi easily. I also read that some people said that Jiraya was at Orochimaru's level and that's not quite right (well maybe if while Jiraya is out of sage mode), but this is a whole different sicussion.