As long as the toiletry bag is clear, zips at the top, and quart size or smaller, you should be able to use it. I used to have a small clear toiletry bag that was basically a strong plastic bag that was similar to a quart size baggie that I would use. The top was an actual zipper and the material was stronger so I did not have to worry as much about the bag breaking. You can find these in most travel section.
As the others have stated, the quart sized item has to be removed. I usually put this at the top or on the outside of my carry on baggage.