Scarlett Whiston from Stoke on Trent picked up the blue packet of drugs from the floor of the mini cab she was travelling in with her mum, Sophie, 20, and put it into her mouth.
Terrified Sophie had her rushed to University Hospital of North Staffordshire where she was kept in for five hours whilst a series of tests were carried out.
Staffordshire Police confirmed the powder was the Class A drug cocaine.
Sophie, who also has a four-year-old son Harley, told reporters it was "frightening" to think how close her toddler might have come to dying.
"Scarlett actually had the bag in her mouth and there was white powder all over the floor of the taxi. It's frightening to think how close she might have come to dying."
She said her daughter was "really stressed and crying" after her ordeal.
A police spokesman said: "The powder has tested positive for cocaine and has now been destroyed. Advice has been given to the taxi driver."
What a shocking story.
Would you ever even think of checking a taxi for potential dangers to your child?