A two-stage spool valve system is common in the hydraulic system of an off-road vehicle and used as hydraulics control element for controlling the hydraulic cylinder. Off-road vehicle industries mostly use a fixed-gain PID based controller for the flow control of the two-stage spool valve system. A hydraulic spool valve system exhibits highly nonlinear behavior, which makes it challenging to design a PID based controller to control its dynamics. This paper presents a method for the dynamic system model development of the two-stage spool valve system. This model will be useful to study the impact on the valve dynamics due to lubricating oil properties variation to avoid the potential system hazards and machine failure scenarios. An alternative control system design approach is also proposed based on the gain-scheduled control technique, wherein the non-linear dynamics of the valve system is linearized at different equilibrium points and PID gains are scheduled at these points. An example of the hydraulic circuit with two-stage spool valve in an off-road vehicle is taken to demonstrate the closed-loop system performance in simulation environment using MATLAB/Simulink tool.