Modelling of disc is crucial in analyzing brake squeal since the disc rotates past the non-rotating pads and the pads are coupled with different areas of the disc at different times. However, in most of the complex eigenvalue analysis of brake squeal, the effect of disc rotation was ignored. This paper proposes a closed-loop coupling model for brake squeal analysis. A modal parameter-based rotating disc model, whose dynamic behavior is represented by rotation speed-dependent equivalent modal parameters, is built through space and time-frequency transformation between reference and moving coordinate systems. The orthogonality of the equivalent modal parameters in state-space is derived. By performing modal synthesis in state-space, the rotating disc is incorporated into brake squeal closed-loop coupling model with other stationary components. Dynamic instability of the system is solved through complex eigenvalue analysis in state-space. It shows that new unstable squeal modes emerge with growing rotation speed and the instability of the system differs under different rotation speeds.