Time complexity analysis is used to determine the most efficient algorithm by comparing how the running time of each algorithm grows with the size of the input. The time complexity of an algorithm can be expressed using asymptotic notations like Big O, which defines the worst-case running time. For example, the time complexity of binary search is O(log n), meaning it grows logarithmically with the input size. Comparing the time complexities of sorting and searching algorithms can help identify the most efficient approach for different situations.