CREATE A NEW USER
Go to System Preferences --> Create a New User in Users & Groups.
Switch to the New User by logging out under the Apple in the Menu Bar.
Open System Preferences.
Are you able to set time zone?
If yes, then the problem is with your base files.
If no, then the problem is in your User's folder.
Log backinto your User.
Go to the User's Library > Preferences
Delete the com.apple.systempreferences.plist*
Log out under the Apple in the Menu bar
Log in and see if you can reset time zone.
*This will cause you to reset your preferences in System Preferences.
**If this fails to fix you can select the plist file in the Trash and select Put Back to restore your previous settings.
Log out/in again to recognize the change.
Show User's Library
The User's Library folder is hidden by default. To unhide: Select the Finder in the Dock. Under Go in the Menu bar > hold down the Option key and you’ll see the Library.
Finding the User Library Folder
http://www.takecontrolbooks.com/resources/0167/site/chap11.html#FindingtheUserLi braryFolder