Whisper, a ten-year-old chestnut Hanoverian gelding, tested positive for fluphenazine after winning the Pffingsturnier dressage competition in Wiesbaden in May.
Fluphenazine, an anti-psychotic and sedatory medication, is banned by the FEI.
Werth, 39, released a statement the following month, announcing that her horse had been diagnosed with an equine central nervous system disorder known as “shivering syndrome” and that her equine veterinarian had prescribed Modecate, a fluphenazine-based drug produced by Bristol-Myers Squibb.
Werth said: "I am glad the decision is finally there.
"That a punishment would come was clear.
"The question was only whether it would last four, five, six or more months."
The FEI says Werth is suspended until December 22, but will not be barred from the 2012 London Olympics.
Her suspension is one day within the limit that triggers an automatic ban under International Olympic Committee rules.
Werth, who is currently seven months pregnant, has 30 days to appeal the judgment.
She has also been fined 3,500 Swiss francs (£2,012) for the incident.
Werth is one of the most successful Olympic riders in history having been part of the German dressage team to win gold medals in 1992, 1996, 2000 and 2008 and the individual title in 1996.
She also won silver medals in the individual competition in 1992, 2000 and 2008.
In its ruling, the FEI said Werth acknowledged the presence of fluphenazine, but said she followed advice that it would clear her horse's system in time to compete.
However, the FEI's tribunal panel said it was "quite shocking" that Werth's vet - Hans-Georg Stihl - believed the drug would not be detected six days after use.
It said the drug, which has a calming effect suitable for dressage horses, is "clearly banned by the prevailing doping rules".
John McEwen, the chair of FEI's Veterinary Committee, said: "This medication has no place in the performance horse close to competition owing to its potent mind altering effects."
Its illegal use was highly publicised when Irish rider Cian O'Connor was stripped of his gold medal in show jumping at the 2004 Athens Olympics, the ruling noted.
The case is the latest in a series of doping incidents surrounding the German Olympic equestrian team, which was officially disbanded in May.
Soenke Lauterbach, the General Secretary of Germany's equestrian federation, said: "The punishment is in line with similar cases.
"The case is classified as doping.
"That also corresponds to our understanding, so we accept the verdict."
July 2009: Committee refuse Werth resignation despite drug shadow
June 2009: German gold medallist regrets doping incident