Tory Bob Stewart used the term on assistant editor of The Spectator Isabel Hardman, who revealed the incident on social media.
She also reported the incident to party whips last week and the issue has sparked a public debate over sexism ever since.
Ms Currie debated the issue on Radio Four's Woman's Hour show today.
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The term totty was "not a terrible thing to be called"
She claimed humour should be used to cope with sexism rather than complaining.
The former Tory politician said: "Isabel Hardman should have too much else to do than to fret about an elderly MP, who is actually paying her a compliment and meant no harm whatsoever."
She added women should be flattered as the day will come when they won't be getting 'compliments' like that.
Controversially, she said that the term totty was "not a terrible thing to be called."
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She said: "If you are a good looking girl, for goodness sake make the most of it.
"Because the day will come when you are not a good looking girl any more."
On the show, founder of the Everyday Sexism campaign, Laura Bates, said: "We are talking about whether she did the right thing, about whether she is strong or weak, meanwhile sexist men are laughing all the way to the bank because we never talk about what is happening and the problem in the first place."
Listeners took to Twitter to label Ms Currie's view "odious", "absurd" and "shocking".
Selin, @selinc tweeted: "Is Edwina Currie for real? Inappropriate sexual remarks in the workplace should be taken as a 'compliment'? #womenshour"