Wikipedia has a fairly good overview of this issue -- how and why a two-party system evolves, and what the pros and cons are.
Based on the analysis there, I would suggest that there are three pillars to two-party domination. A solution would have to address one or more of them:
The following article explains clearly how our current voting method (called "Plurality voting") automatically leads to a duopoly:
http://www.masquilier.org/republic/election/plurality-duality.php
The solution is of course to have a better voting system:
http://activistsolutions.org/node/164