The 44-year-old Woosnam, starting his second round on the 10th hole, had it going early as he birdied his first, third and fourth holes to get to 7-under for the tournament.
After a par at the fifth, Woosnam strung together three straight birdies and five in a seven hole stretch to capture the lead.
A bogey on his 15th hole, his only one of the day, was followed up with an iron to within four feet at the par-3 8th, and the birdie putt dropped to get him to 12-under.
'It was possibly the best round I have played since winning the Cisco World Match Play,' said Woosnam, referring to his most recent win in October of last year. 'I am not hitting particularly long off the tee, but I am hitting it straight and it is important to hit the fairway here. The rough is so thick and tough you can't go anywhere out of it.'
Bennett, trailing Woosnam by only a stroke, followed up his Thursday 67 with a birdie barrage that included four in a row at 15, 16, 17 and 18. Despite a double bogey six at the fifth, Bennett finished the day with a 6-under 66 and in a tie for second place.
Leaney, the first-round leader after a mistake 64 Thursday, managed yet another bogey-free day and a 3-under 69 that now has him a stroke behind Woosnam at 11-under.
Dougherty vaulted onto the leaderboard with a pair of eagles on his inward nine and closed with a 7-under 65.
'I got off to a good start with birdies on the sixth, seventh and eighth which are not easy birdie holes,' said the tour rookie, who shot a seven-under 65. 'The two eagles on the back nine were a bonus.'
Ryder Cupper Padraig Harrington had an unusual day of scoring while posting a 6-under-par 66 that has him just three off the pace. His Friday the 13th round saw him birdie every odd hole he played except, of course, the 13th.
Retief Goosen got off to a slow start but carded three birdies after the turn for a 2-under 70 that drops him from second place into a tie for sixth.
A trio of European Ryder Cup players are grouped together at 7-under.
Colin Montgomerie, Thomas Bjorn, and the struggling Lee Westwood shot second rounds of 66, 70 and 67, respectively.
Ernie Els also had a strange look to his scorecard that included four birdies and four bogeys and an eagle. He sits seven behind Woosnam at 5-under par.
American Rich Beem double bogeyed the par-3 16th and then bogeyed the 17th to miss the cut.
Full-field scores from the Linde German Masters