Fable TLC was designed to only work with keyboards, so no gamepad would ever work with it by default.
However, some (including myself) have used ControlMK for Fable which works perfectly, you can use it for any game also. It works with the 360 controller as well:
Program & Fable TLC Profile:
Download (download the two attached files in chaos' post)
After you install ControlMK, make sure your 360 controller is plugged into the comp, and open up ControlMK.
There will be 2 drop-down boxes saying: "Controllers Found" and "Active Controllers". Select the 360 controller for both of them, and then next to the Profiles box, there will be a button with the ">" on it. Click that, and then click "Import", find the Fable TLC Profile you just downloaded, and then import it into the program. Click the "Save" button, and then minimize the window... and now you can play Fable with your 360 controller.