Accurate detection and tracking of small objects, such as pedestrians, cyclists, and motorbikes, is critical for traffic surveillance systems, which are crucial for improving road safety and decision-making in intelligent transportation systems. However, traditional methods face challenges such as occlusion, low resolution, and dynamic traffic conditions, necessitating innovative approaches to address these limitations. This paper introduces DGNN-YOLO, a novel framework integrating dynamic graph neural networks (DGNN) with YOLO11 to enhance small-object detection and tracking in traffic surveillance systems. The framework leverages YOLO11's advanced spatial feature extraction capabilities for precise object detection and incorporates a DGNN to model spatial-temporal relationships for robust real-time tracking dynamically. By constructing and updating graph structures, DGNN-YOLO effectively represents objects as nodes and their interactions as edges, thereby ensuring adaptive and accurate tracking in complex and dynamic environments. Additionally, Grad-CAM, Grad-CAM++, and Eigen-CAM visualization techniques were applied to DGNN-YOLO to provide model-agnostic interpretability and deeper insights into the model's decision-making process, enhancing its transparency and trustworthiness. Extensive experiments demonstrated that DGNN-YOLO consistently outperformed state-of-the-art methods in detecting and tracking small objects under diverse traffic conditions, achieving the highest precision (0.8382), recall (0.6875), and mAP@0.5:0.95 (0.6476), showing its robustness and scalability, particularly in challenging scenarios involving small and occluded objects. This study provides a scalable, real-time traffic surveillance and analysis solution, significantly contributing to intelligent transportation systems.