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God love Kitty Kelley.

Just look what her stiletto-tipped tome on Nancy Reagan has done for Terry Sweeney: It has given him a second wind, resuscitated his one-(wo)man show on the former first lady and plopped it down in The Ballroom, where it is generating some deliciously malicious fun (till Saturday) before taking off for Boston and San Francisco to do the same there.

”The act was in mothballs until Kitty Kelley`s book came out, then people called me up, and here I am,” the comic confesses, blissing out about being back from the no man`s land where all outmoded political impersonators eventually wind up.

When called to duty, he was out in California writing screenplays, which is what he does now. ”Shag” is the one that got to market, and there are three others on various launching pads around Hollywood-but the national commotion Kelley caused with her tattletale biography swept Sweeney back into the spotlight with the Nancy Reagan impersonation he perfected on ”Saturday Night Live.”

”Isn`t that Kitty a darling?” Sweeney purrs cattily, lounging in his dressing-room after the show one night. ”But, in the book, I thought she was too gentle, too easy-going, don`t you?” He shudders at the thought Kelley`s horror story could have been worse. ”What was so horrible she left it out of that book?”

For someone who has made a specialty of spoofing Nancy Reagan, the book is a minefield of potential material. ”I`m in the book, y`know. I`m one of those thousands she thanks. She asked me what I thought about Nancy-and a bit about Ron Reagan, because I worked with him when he hosted `Saturday Night Live.` The first time I met him, I was coming down a corridor dressed as Nancy, and he yelled out, `Hi, Mom,` and I said, `Hi, Son,` and we ad-libbed a little `reunion` right in the hallway.”

Sweeney put in one full season on ”Saturday Night Live,” and he figures that`s it for him-”unless there`s a huge kind of pressure, a public outcry. A write-in campaign would be great.”

He considers the experience a mixed blessing. ”It`s the Harvard of comedy-a magic key that opens up doors for you-and I`ll always be grateful I graduated, but it isn`t what people think it`s going to be. It got very conservative. Almost everybody left the year I left-I was in `the movie star cast`-Randy Quaid, Robert Downey Jr., Joan Cusack. We couldn`t work within the confines of what the show had become.

”If you`d consider having Andrew Dice Clay as a host, that says a lot about a show. In the past, he`d be somebody we would mock on the show.

”Me? I mock Nancy, somebody in power. It`s the traditional role of the joker, the one who makes fun of the king and points out what`s wrong with the ruling class.”

In any event, the queen seems unamused. Mrs. Reagan has not yet dashed off a thank-you note to Sweeney-and should, he thinks. ”I give Nancy something she doesn`t have in real life: A sense of humor. She`s not, let`s face it, a laugh a minute.

”My show is like group therapy for a nation that had to endure the Reagans. People have a lot of residual anger. We`re still living in Reagan fallout-the S&L crisis, so many things that happened during the Reagan years that we`re living with right now during the `kinder, gentler` presidency of Bush.”