A highly sensitive fiber optic current sensor using terbium doped fiber is presented. The Verdet constant of the terbium doped fiber at 1300nm is found to be 19.5μrad/A using both a polarimetric and interferometric type sensor. Measurements on a Sagnac-loop sensor using 10cm of terbium doped fiber placed inside a solenoid show over 40dB of open loop dynamic range as well as a minimum detectable current of 0.1mA. Extrapolations of our measurements show that in a practical setup with Tb fiber wrapped around a current carrying wire, the optimal configuration is a 0.5m piece of Tb fiber with a noise limit of 22mA/√Hz. This sensor is promising for current sensing applications that require high sensitivity and small size, weight, and power.