The unmarried star complained of not feeling well and had holed up in her room.
She appeared to have panicked after an asthma attack and was rushed to a private hospital by hotel staff, where she died shortly after being admitted at 5:30 p.m.
Police said the singer, registered under the name Tang Lijun, was in Chiang Mai with a French male companion who had requested that an autopsy not be performed.
Her brother flew to Thailand to make funeral arrangements.
Born in Taiwan, Teng began singing at the age of six and became famous at the age of 11 when she participated in a contest sponsored by a Taiwanese television station.
By the age of 21, she had captivated Asian audiences around the world and achieved cult status in Hong Kong, Taiwan, China and Japan.
Politics also influenced her life, and her songs became a barometer of cross-Channel relationships.
Although the Beijing government banned her sentimental love songs in the 1980s as “spiritual pollution,” fans across China still listened to her songs on pirated tapes smuggled from Hong Kong.
Meanwhile, the Taipei government used her songs in anti-communist propaganda broadcasts to the mainland until the mainland finally lifted the ban at the end of 2010 as relations improved with Taiwan.
Teng, whose father was a Kuomintang military officer, declined invitations to visit and perform in mainland China.
She had criticized the Chinese government over its response to the June 4 Tiananmen incident. During her stay in France, she often attended concerts organized by exiled democratic activists in Paris.
By that time, she had fallen out of the spotlight and no longer recorded.
She has lived quietly in France for the past six years, becoming a Buddhist and only returning to France for special occasions or to appear on TV specials.
The news of her death shocked and saddened many people in the entertainment industry.
Concert promoter Florence Chan Seok-fan, who organized Ten's first concert in Hong Kong in 1976, described her as “always striving for the highest quality” and always taking care of her health, especially in recent years. He recalled that he was a very professional artist.
Radio and television stations reorganized their programs in her memory last night, with more scheduled tonight.
Some record stores in Mongkok had increased the price of Teng's CDs by 20%, and the highly collectible old-style records were being sold for 10 times more at HK$700 each.
Pop Music Laser owner Denny Wong Hing-gun said he had sold 150 Ten discs yesterday and was out of stock despite the price hike.