I've just solved this for myself by completing next steps:

1. Click on "File" in Android Studio
2. Choose "Settings..."
3. Open the "Tools" branch
4. Choose "Terminal" in the dropped down list
5. Change powershell.exe to cmd.exe in "Shell Path"
6. Click on "Apply"

In case you still have problems, make sure that "Include system environment variables" is enabled in the right most part of the "Environment variables" bar.

If nothing helped above, then you must make sure that you have "Path" environment variable for Flutter SDK (it has to end with .../flutter/bin).