This paper presets a new algorithm for nonlinear distortion cancellation and channel re-estimation in an iterative manner. Whereas in practical OFDM systems, in which nonlinear amplifiers are used, data as well as pilot symbols are nonlinearly distorted. As perfect channel state information is often assumed in many works and papers, the effect of nonlinear distortion on pilot symbols is often not accounted for, and only data symbols are considered. However, as pilot symbols are used to obtain channel state information, distortion inflicted to pilot symbols by nonlinear amplification is of great importance, and for this reason should be accounted for. To address this issue, simple algorithm will be introduced for joint data recovery and channel re-estimation in an iterative manner. This algorithm iteratively estimates nonlinear distortion and then uses it to compensate this nonlinear distortion present at data and pilot symbols, which are then used for subsequent and more precise channel re-estimation. As it is shown in this paper, proposed algorithm can be used to reduce nonlinear distortions even in a situation, when highly nonlinear amplifiers are applied.