The doctor, who has not been named, may never work again. The accident happened at Charing Cross Hospital, Hammersmith, west London, in December 1992.
Although she suffered no illness as a direct result of the tiny wound, she struggled to fight growing fears about needles, blood and Aids. She eventually went off work sick in October 1994 and is now afraid to leave her home because of a phobia of needles.
The out-of-court settlement was reached last month with North Thames Regional Health Authority and the Ealing, Hammersmith and Hounslow Health Authority, who were not in charge of Charing Cross Hospital at the time but have assumed responsibility since.
In an interview with the British Medical Association's News Review magazine, the doctor said she felt she had not been given proper training about what to do about what are known as "needlestick injuries".
"After the incident, I kept worrying about what I could have caught. I began to avoid high-risk patients. I hid in the loo so someone else would deal with them. I avoided stitching wounds and pretended blood tests I had never taken had got lost," she said.
"I thought I had been lucky once, but it could easily happen again. I could not trust my colleagues to dispose of their sharps [needles and sharp instruments] safely."
The woman realised something might be done to help her after she saw a story in the BMA magazine about a doctor who sat on a needle. He was supported by the association in a successful claim for damages.
Victoria Allman, a solicitor for the BMA, said the case showed how important it was for doctors to be trained in procedures for dealing with sharp implements and for reporting accidents.
"If the doctor had been more appropriately dealt with, she may not have suffered as she has," Ms Allman said.
A spokeswoman for the Ealing, Hammersmith and Hounslow Health Authority said the trust did now have a "robust" needlestick policy in place and the authority, which accepted liability for the injury, was pleased that the matter had been resolved.