Dr Nick Panay, from the Royal College of Obstetricians and Gynaecologists, told a GPs' conference the hormone could also improve women's energy and mood.
But he complained that since there were no licensed testosterone products for women, who need much lower doses than men, he had to prescribe the hormone “off-label” which he found “frustrating”.
The NHS should make testosterone available to every woman who could benefit, said Dr Panay, who is a consultant gynaecologist at Chelsea and Westminster Hospital NHS Foundation Trust. He added that all women should be told about the potential benefits of taking the hormone.
Around one in three women is estimated to be affected by a loss of sex drive at some stage in their lives. The condition is particularly likely to affect menopausal women, with 15 per cent reporting symptoms.
Dr Panay told the Royal College of GPs' conference in Harrogate: “We're not saying that female androgen replacement is a universal panacea. We're not saying it is a female Viagra. Women are, after all, much more complex creatures than men [and do not respond] to the on/off button that Viagra offers.
“But I think that it should be part of the counselling process.”
Loss of sex drive, known medically as hypoactive sexual desire disorder, can be caused by medical or mental health problems, hormonal factors and relationship issues.
Dr Panay said patients who had taken testosterone had reported huge increases in their mood, energy, muscle strength, and stamina. He said: “They go from feeling drained to being able to run marathons again.”
But he complained all currently licensed testosterone medications are designed for men and have to be measured down for women.
Dr Channa Jayasena, a clinical senior lecturer in endocrinology at Imperial College London, told the BBC testosterone can be given to women in much lower doses than men.
He said: "It's mainly given in a patch. Women have both sex hormones – oestrogen but also testosterone – made by their adrenal glands and also the ovaries.
“It is a natural hormone but less is known about its effects.”
Last year, GPs wrote more than 370,000 prescriptions for testosterone, which costs the NHS £21.3m annually.