Time said Banerjee, referred to by her supporters as Didi, was labelled by critics as a "mercurial oddball and a shrieking street fighter".
"But ultimately she proved to be the consummate politician. Through successive elections, Banerjee steadily expanded her power base while chipping away at those of her opponents," the magazine, which released its 2012 list of the 100 Most influential people in the world today, said.
It said Banerjee's lower-middle-class background was no obstacle in a country "notorious for its dynasties".
"In New Delhi's back rooms, where political horse trading is the name of the game, she excelled. On the streets, she out-Marxed the Marxists.
And as chief minister of her home state, she has emerged as a populist woman of action — strident and divisive but poised to play an even greater role in the world's largest democracy."