Ford said he tried the drug "in one of my drunken stupors" about a year ago, but insisted he's not a drug addict or an alcoholic.
"I just heard that admission, and the police service and the judicial system have to take action," said Wynne.
"There are laws around when elected municipal officials can be, must be removed from office, and that's why I say the police service and the judicial system have to take action."
Hours earlier, the mayor's brother, Councillor Doug Ford, accused Toronto Police Chief Bill Blair of playing politics by saying he was "disappointed" when asked how he felt about a video that appeared to show Rob Ford smoking crack cocaine.
Blair announced last week that the video — first reported by two media outlets in May — is now in the hands of the police.
Wynne wouldn't comment on Doug Ford's suggestion the police chief step aside while the police services board investigates his conduct other than to say she has confidence in Blair.
Progressive Conservative Leader Tim Hudak had no comment on the "goings on" at Toronto city hall, but said he would still welcome Doug Ford as a PC candidate in the next Ontario election.
"We'll see when the election happens what Doug's intentions are," said Hudak. "Doug will make decisions down the road to run, the riding association decides on who candidates are, and we'll see when the election campaign takes place."
New PC MPP Doug Holyday, who was Ford's deputy mayor until he won a provincial byelection Aug. 1, smiled as he told reporters he was glad to be at the legislature and not at city hall. But after hearing Ford's crack admission, Holyday said the mayor should step aside and seek treatment.
NDP Leader Andrea Horwath said it's up to city council to deal with the mayor, not Queen's Park.
"I really respect the municipal council's role here," said Horwath. "I think everybody realizes this is a messy situation, but I think making it messier is not in anybody's interest."
Wynne also emphasized it's up to city council, not the province, to deal with Ford, but wouldn't call on him to step aside.
"I am not going to preempt what the mayor may or may not do," said Wynne. "The mayor will have to make his decisions about what is appropriate right now. That's his responsibility."
Municipal Affairs Minister Linda Jeffrey said there are no plans to change Ontario's municipal act to give the province more powers to act in cases like Ford's, and will not call in the OPP to take over the investigation from Toronto Police.
There were calls for changes to the law after London, Ont. Mayor Joe Fantana refused to resign despite facing criminal charges over alleged misuse of public funds to help pay for his son's wedding reception.
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