“She would have been around nine or 10 years old probably when she got this doll,” she said.
The high-quality Chad Valley doll has glass eyes, a swivel head, a velvet body and jointed limbs.
Ms Taylor believes it would have been “well loved” by young Princess Elizabeth.
“You can see the little nose has been rubbed. It’s been heavily played with,” she said.
Ms Taylor has estimated its value as £800-£1,200, but she said it would not surprise her if the unique doll went for more.
“It’s very rare that anything belonging to Her Majesty ever comes on the market,” she said.
“As far as I know this is the first time a doll like this, a royal doll, has ever come on the market.”
The doll came to Kerry Taylor Auctions from the family of Clara Knight, who was a royal nanny to Princess Elizabeth and her sister Princess Margaret.
Three floral dresses and other items worn by Princess Elizabeth and Princess Margaret are also on offer in the December auction.
But perhaps the most sought-after item for sale is a one-off gown worn by Diana, Princess of Wales on a visit to Bahrain in 1986.
The ivory Elizabeth Emanuel silk jersey dress was specially made for Diana and was captured in several films and photographs, Ms Taylor said.
“I think it’s one of the most beautiful Diana dresses,” she said.
“It has this beautiful bodice, all hand-embroidered with rhinestones and beads.
“And it was specially ordered by Elizabeth Emanuel and she only made the one, specifically for the Princess. So it’s a real one-off. It’s spectacular.”
The estimated value of the dress, which was purchased from a second-hand dress shop in Hereford in 1994, is £60,000-£100,000.
A double-breasted Chelsea blazer which Ms Taylor said had also belonged to Diana is also up for sale.
The blazer and dress were taken to the second-hand shop by a housekeeper of Mynde Park estate, which Diana frequented as a guest.
The Passion for Fashion auction is at Kerry Taylor Auctions in London on December 10.