Currently, there are just two drugs available to treat baldness, which both have moderate side effects and often produce disappointing hair regrowth results.
The only other option available, chosen by celebrities including Elton John and chef Gordon Ramsay, is a hair transplant.
The osteoporosis drug, discovered to work for baldness by the University of Manchester, targets a protein that acts as a brake on hair growth and plays a key role in hair loss. It could also be used to treat women with alopecia.
Lead scientist Dr Nathan Hawkshaw, from the University of Manchester, said: 'The fact this new agent, which had never even been considered in a hair loss context, promotes human hair growth is exciting because of its translational potential.
'It could one day make a real difference to people who suffer from hair loss.
'Clearly though, a clinical trial is required next to tell us whether this drug or similar compounds are both effective and safe in hair loss patients.'
Male pattern baldness is the most common cause of hair loss, which experts say can be extremely distressing for men.
But the only existing drugs to treat it are minoxidil and finasteride, which have previously been said by experts to work better at stalling hair loss than causing new hair to grow.
The British researchers first discovered a potential treatment in cyclosporine A - a drug given to patients after organ transplants since the 1980s to suppress their immune system. But this drug also causes serious side effects including kidney damage.
Luckily, they found that WAY-316606 works in the same way without causing harm.
After just six days it caused human hair follicles to grow 2mm. Follicles which were not treated with the drug only achieved growth of 1.5mm over the same period.
The scientists are the first to discover the importance of a protein called SFRP1 in hair growth.
The osteoporosis drug blocks the protein, sending follicles rapidly into the active 'anagen' phase of hair growth. After two days, hair growth had already increased significantly in the treated follicles.
This is 'clinically very relevant' since most previous similar studies have relied on cells, Dr Hawkshaw said.
He added: 'Interestingly, when the hair growth-promoting effects of cyclosporine A were previously studied in mice, a very different molecular mechanism of action was suggested.
'Had we relied on these mouse research concepts, we would have been barking up the wrong tree.'
The research is published in the journal Public Library of Science Biology.