The development of Intelligent Transportation System (ITS) has brought about comprehensive urban traffic information that not only provides convenience to urban residents in their daily lives but also enhances the efficiency of urban road usage, leading to a more harmonious and sustainable urban life. Typical scenarios in ITS mainly include traffic flow prediction, traffic target recognition, and vehicular edge computing. However, most current ITS applications rely on a centralized training approach where users upload source data to a cloud server with high computing power for management and centralized training. This approach has limitations such as poor real-time performance, data silos, and difficulty in guaranteeing data privacy. To address these limitations, federated learning (FL) has been proposed as a promising solution. In this paper, we present a comprehensive review of the application of FL in ITS, with a particular focus on three key scenarios: traffic flow prediction, traffic target recognition, and vehicular edge computing. For each scenario, we provide an in-depth analysis of its key characteristics, current challenges, and specific manners in which FL is leveraged. Moreover, we discuss the benefits that FL can offer as a potential solution to the limitations of the centralized training approach currently used in ITS applications.