The ocean towed cable system is a classic example of fluid-structure interaction (FSI). This interaction can exhibit stability or oscillation between a highly deformable moving cable and the surrounding turbulent flow. However, in dynamic simulations of towed cable systems, a constant drag coefficient for an infinite circular cylinder is often used based on experimental data. An innovative fluid-structure interaction method is introduced to obtain accurate drag distribution along cable to couple with towed system dynamics. A modified nodal position finite element method (NPFEM) coupled with Reynolds-averaged Navier-Stokes (RANS) approach has been utilized to predict hydrodynamic forces along the cable. A data exchange algorithm has been developed specifically for fluid-structure interaction within the towed cable system where the cable profile is transferred to construct the flow domain while hydrodynamics is interpolated for NPFEM analysis. A topology partition around cable is applied. A multiblock grid is generated around cable. The simulation results of the fluid-structure interaction of the towing system are verified. This FSI scheme reveals how strongly hydrodynamics determine cable dynamics and induce vortex structure vibrations around a towed cable system. Parametrically controlled structured grid generation and their applicability for complex flow fields have also been discussed. Detailed descriptions of boundary layer separation evolution around spatially distributed cable are provided. This FSI scheme reveals a real strongly hydrodynamic determined cable dynamics and vortex structure induced vibrations around a towed cable system. The proposed method enhances predictive accuracy of the towed system dynamics response.