Teske (formerly Hetherington) birdied the final hole for a 4-under-par 68 and a 15-under 273 total.
The result was bittersweet for Teske's Australian caddie, Shaun McBride, who also happens to be Hjorth's boyfriend.
'I'm delighted for Rachel but I also feel desperately sorry for Maria,' said McBride.
Hjorth shot 69 on Saturday, while Beth Daniel carded a 72 to finish in third place. The top three finishers were all tied for the lead as the final round began.
This is Teskes fourth career LPGA victory. She started the week with sore ribs and little expectations, but left with a $315,000 first-place check.
Teske took the lead with a par 3 at the 17th, while Hjorth three-putted for a bogey, pushing her second putt from two feet. Hjorth matched Teske's birdie at the final hole, though it proved to be superficial.
Laura Davies, who won last week, shot the lowest round of the day, a course-record 64 to finish tied for 11th.
U.S. Open champion Karrie Webb tied for 21st, while Annika Sorenstam finished one stroke higher and in a tie for 25th.
Full-field scores from the Evian Masters