Creating a new template page for “services”

I know that wordpress allows you to create a home.php and other seperate pages. In the particular theme I am working with, there is a custom contact.php page which when I create my contact page I can easily select the contact.php template in the drop down under “template”. So now I am trying to create another page called “services” but its not listing under the drop down! I have been reading the wordpress page relating to this but to no avail.
Please help me solve this problem.
Thank you very much!