IEEE 802.11 WLAN Access Points(APs) are configured in the 2.4GHz band extensively to cater for the needs of all WiFi-enabled devices. In densely populated areas this causes considerable interference amongst the APs since there are only three orthogonal channels. Downlink data throughput reduces due to co-channel and overlapping channel interference. Efficient channel selection is a significant problem due to the dynamic wireless environment. Our proposed Dynamic Channel Selection(DCS) algorithm selects the optimal channel based on the periodic scan of the environment by a co-located monitoring radio unit. Frequent switching of channels is also reduced to maintain the AP's performance and stability. It is an innovative solution, readily applicable to the existing WLAN standard not necessitating any change in IEEE 802.11 MAC Layer. Our results show an improvement of up to 35% in the data throughput in six different real-time network scenarios.