DTMF Decoder IC like CM8870 is easily available in market so I have used it ,but no problem if you get any other like KT3170 only pin name will be different.  (Refer to datasheet for standard circuit)

The decoder uses digital counting techniques to detect and decode all 16 DTMF tone pairs into a 4-bit code.

               --------------
           l              l- d3
           l     DTMF     l- d2
signal in -l    Decoder   l- d1     4-bit binary out
           l     chip     l- d0
           l              l- strobe
            --------------

CIRCUIT DESCRIPTION

After detecting presence of a valid DTMF signal StD goes high for Short duration (Refer Data sheet) and outputs Q1-Q4 gets latched according to received tone-pair  (Refer above table)

ALGORITHM

• Poll for Ring  Detection.

• Activate of relay to place 220 Ohm (1/2 watt.) resistor in line so as to lift phone .(The 220-ohm loop on telephone line disconnects the  ringer from the telephone line in the exchange.)

•  Poll for StD and when it goes high Read port 0  to find out received tone-pair from Q1-Q4.

• Take control action according to received tone & Poll for the strobe again if you wish and  deactivate relay when you finish.

  The circuit below is my project circuit named Tele Remote.

CODE EXAMPLE - FOR ABOVE CIRCUIT

Condition: Make P1.0 high if Key 1 is pressed otherwise terminate session directly.