Dietz spoke in an interview on national television late Monday and became the first rider to acknowledge doping among the team, now known as T-Mobile.
He did not implicate any other riders from the team, but said they must have been aware of what was going on.
Dietz said the two doctors introduced EPO in 1995, explaining the way it functions and the risks connected to taking it.
"If we wanted to ride at the top, we would likely have to take it," Dietz said.
"They offered it, but in such a form that everyone knew: If I don't take it now, I'll probably have such bad results at the of the season that my contract would not be extended. It was clear," Dietz said.
The two doctors were recently suspended by the team.
Dietz' admission follows revelations by former Telekom massage therapist Jed d'Hont earlier this month.
According to d'Hont, two doctors supplied EPO to former Tour de France winners Bjarne Riis and Jan Ullrich and other riders and the substance was supplied by the University of Freiburg clinic.
D'Hont worked for the team from 1992-96. Riis won the 1996 Tour and Ullrich finished second. Ullrich won the 1997 Tour.
Ullrich retired in February after being implicated in the Spanish doping scandal, but he has denied ever taking performance-enhancing drugs. Riis and the two doctors also have denied doping.
T-Mobile said Tuesday it would revise its cooperation with the Freiburg clinic at the end of the season. The clinic provides regular health care to its riders.
Flirtation with Turkey turned out to be disastrous for Russia, but as long as Russia is in the game, the stakes should be high