The monarch acknowledged the "difficult times" in her late daughter-in-law's life at the opening of a $6.48 million (GBP3.6 million) fountain in London's Hyde Park.
The Queen's son Prince Charles and Diana's children PRINCES WILLIAM and HARRY attended the event, along with Diana's brother EARL SPENCER.
The Queen said, "By any standards, Diana's tragic death held the attention of the world. Central to this remains the extraordinary effect Diana had on those around her."
She added Diana had a special ability to "not only to touch people's lives but to change them".