Yes, she needs a valid Learners permit to drive legally.
Source(s):
http://www.vicroads.vic.gov.au/Home/Licensing/GettingYourLs/CarLearnerPermi...

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While the answerer quotes an Austrailian page, and you're asking about Tennessee law, pretty much the law is pretty consistent in most places. You need some form of permit or license usually to drive in and on public roads. Now, the Tennessee website rules are a little unclear in the grey area you are talking about -- because it's simply not clear on what you're supposed to do if you're over 18 and an American citizen. (If you were a foreign national you could get a temporary learners permit, if you are under 18 the rules are clear..) What applies to people over 18 is that the GDL laws don't apply to people over 18, so some of the requirements.. parental consent, the time requirment, etc. don't apply.

It looks like you're supposed to apply for a Class PD license (learners permit) and then when you're ready to take the drivers test for the Regular Class D license you can simply do so at any time.

Without your wife getting a license, I would assume that any insurance you have would be null and void in case of an accident and her behind the wheel. Also, you risk a potential ticket or whatever penalties they have for unlicensed drivers.
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According to the Tennessee Department of Safety:
"When you drive with your learner's permit you will need to be accompanied by a person who is at least twenty-one (21) years of age and has a valid driver license. Such person must be fit and capable of exercising physical control over the vehicle and must be riding in the front seat next to you."
Source(s):
http://www.tennessee.gov/safety/DLFAQS/dlquestion7.htm

http://www.tennessee.gov/safety/dlhandbook/DL_HandbookWeb2007.pdf

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Yup. See DMV.com Tennessee for an easy guide on driving related rules. DMV.com has guides for every state.
Source(s):
DMV.com Tennessee

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