Turkey is the most reliable route to deliver gas to Europe, he said, on the sidelines of a summit in Kazakhstan.
“In the course of the work of this hub, which we could create together, of course, it would also be a platform not only for supplies, but also for determining the price, because this is a very important issue — the issue of pricing,” the Russian president told Mr Erdogan.
“Exorbitant” prices could be regulated “without any political overtones”, he said.
Mr Putin's proposal comes as Russia seeks to redirect its gas supplies away from the European Union amid western opposition to its war in Ukraine and damage to the Nord Stream sea pipelines, which is being investigated by Sweden and Denmark amid suspicions of sabotage.
Mr Erdogan did not comment on the proposal, which was discussed in a televised exchange.
Mr Putin held consultations with Turkey's energy minister and leaders from Russian and Turkish-owned energy companies on Wednesday, according to Russian state news agency Tass.
Turkey has maintained ties with both Russia and Ukraine since Moscow invaded its neighbour in February, and has offered to mediate between the two sides.
Turkish foreign policy is at odds with European priorities, EU enlargement chief Oliver Varhelyi said this week.
Ankara could also work with Moscow to export Russian grain and fertiliser to low-income countries, Mr Erdogan said in the meeting with Mr Putin.
“We are determined to strengthen and continue the grain exports under the Istanbul agreement and the transfer of Russian grain and fertiliser to less developed countries via Turkey,” he said, referring to the UN export deal.
“We may work on determining the name of countries. It is important that we focus on the poor countries rather than developed countries,” he added.