In this paper, the study of a plasma diagnostic system based on the THz time domain spectroscopy technique is presented. Such a system could potentially probe a large part of the electromagnetic spectrum currently covered by several other diagnostics in a single measurement. This feature, keeping in mind the basic requirements for plasma diagnostics in nuclear fusion experiments, such as robustness and hard environment applicability, as well as durability and low maintenance, makes the diagnostic of great interest. A conceptual design of the THz-TDS diagnostic has been developed, starting from the well-established classical microwave and far infrared plasma diagnostics landscape. The physical constraints and required instrumental characteristics have been studied and are described in detail here, together with the solutions available for each type of plasma measurement. Specific experimental laboratory tests of the different experimental configurations have been carried out, evaluating the capacity and potential of the novel diagnostic, together with the instrumental constraint, within the diagnostic parameter space.