Here’s what I learned from My Salinger Year by Joanna Rakoff:
How to write dialogue in a novelistic or cinematic way:
Include details about the surrounding area. The weather, scenery, anything the characters interact with, other people in the room. This is especially useful at the start of the scene, and if/when the scene changes.
When you add context for the reader it should relate to the dialogue before it. It can also help establish the relationship of the characters.
There are three people to consider in a two-person conversation: the two people in the scene and the reader. Dialogue can be inside-baseball between the two characters even it’s unclear to the reader, but interjections by the writer can clarify and invite the reader into what’s happening.
A scene should not end at the end of the conversation, but at a point when a character says something that transitions into the next scene.
And here’s the link to Joanna’s conversation with Estelle Erasmus on Freelance Writing Direct.