The 25-year-old is up against New Zealand duo Kelly Brazier and Portia Woodman, as well as France internationals Romane Menager and Safi N’Diaye.
Fans, international players, coaches and media all have the opportunity to vote for the player who has excited and inspired in 2017.
To vote for Lydia, click here. Voting closes at midnight on Sunday.
The shortlist was selected by a new star-studded World Rugby Awards panel comprising Rugby World Cup winners Richie McCaw, John Smit, George Gregan, Maggie Alphonsi and former England coach Clive Woodward alongside Brian O’Driscoll, Fabien Galthié and Agustín Pichot.
Once voting has concluded the panel will consider the winners of the prestigious awards which will be presented at the World Rugby Awards at the Salle des Etoiles in Monte Carlo on 26 November.
Thompson’s selection comes after scoring 12 tries in 10 matches for England, including a brace in the World Cup final defeat to New Zealand.
She played four matches in England’s Six Nations Grand Slam-winning campaign, scoring a hat-trick against Wales, and helped the Red Roses win the International Women’s Rugby Series in New Zealand.