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Topological insulators (TIs) present a neoteric class of materials, which support delocalised, conducting surface states despite an insulating bulk. Due to their intriguing electronic properties, their optical properties have received relatively less attention. Even less well studied is their behaviour in the nanoregime, with most studies thus far focusing on bulk samples - in part due to the technical challenges of synthesizing TI nanostructures. We study topological insulator nanoparticles (TINPs), for which quantum effects dominate the behaviour of the surface states and quantum confinement results in a discretized Dirac cone, whose energy levels can be tuned with the nanoparticle size. The presence of these discretized energy levels in turn leads to a new electron-mediated phonon-light coupling in the THz range. We present the experimental realisation of Bi$_2$Te$_3$ TINPs and strong evidence of this new quantum phenomenon, remarkably observed at room temperature. This system can be considered a topological quantum dot, with applications to room temperature THz quantum optics and quantum information technologies.