Clive Goodman said he received the book in 1992, telling the Old Bailey court in London that the late princess "wanted me to see this book".
Goodman, who was jailed in 2007 for phone hacking, denies two counts of conspiracy to commit misconduct in a public office.
He is accused of paying police for royal phone directories.
Asked why the princess sent him the book, Goodman said: "She was in a very bitter situation with the Prince of Wales at the time. She felt she was being swamped by the people close to him and she was looking to...To take him on."
"She called me that afternoon and asked me if I had got it," Goodman told the court.
The book was "one of a number that came to me over a number of years", he said.
Asked if any of them came from public officials, he said: "No, not one of them."
Goodman also denied ever paying police officers for royal phone books or for stories.
Earlier, the court heard from the mother of former chief executive of News International Rebekah Brooks.
Deborah Weir told the court her daughter urged her not to watch the news as it emerged that a murdered schoolgirl's phone had been hacked.
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