Called shots very quickly turn into on-demand critical hits. Some creativity is required to avoid this fate. Be sure to explain to your players that DnD's dice is not a realistic fight simulator, and is never intended to be a realistic fight simulator.
Consider letting your called shots be "fluffy," and hard to turn into measurable tactical advantages. The dice are already balanced to provide the right advantages, so something easily abused automatically is going to imbalance the game. However, there is one final balancing agent in any game: you, the DM. You balance the world the way you like If you want to bring some color into your world, nobody should stop you from doing it.
My recommendation would be to allow for called shots, but explain that their effects will be at your discretion, and generally they will be "fluff pieces." If a normal attack might reduce an enemy to 0HP, a called shot to the eye might be a strike that goes right back to his brain. Tell players they are free to try to turn these fluffy effects into meaningful tactical advantages, but that they should generally expect that they don't do anything numeric. "Called shot: not the face" might be particularly useful when punching a vain opponent who you have to befriend eventually and really don't want to insult. And, of course, as DM you have final say... a called shot doesn't always go according to plan.
Once they're comfortable with this sort of richer combat that doesn't affect the dice, introduce the dice into the game. Offer them a chance to pony up in exchange for effects that are more monetizable. Let them take an attack at a penalty, in exchange for a called shot that might be easier to convert into a tactical advantage. Perhaps the archer says "Called shot: knee, with a -4 penalty," and hits. You might decide that immobilizing the enemy is too powerful in this engagement, so you weave the story that the shot hits, slicing through the muscle of the enemy's lower leg. That, at best, is "fluff." However, that may leave a blood trail to help find the enemy easier, which could dramatically change the way the game proceeds. Maybe a few called shots in a row can start to lead to a more narrative combat instead of less of a dice rolling combat. Find your own balance for how the party is allowed to capitalize on the fluffy results of called shots mid-combat, and don't be afraid to change the mechanics if the party abuses it.
Or perhaps they get a natural 20. In such a case, they did a called shot, give it to them. Let them get the "critical hit" effect of hitting a vulnerable part of the enemy. Let the arrow strike true and tear the knee apart.
The key is that the player gives up something in exchange for an unknown. They have to weigh the clear loss of dice-power against how you, as a DM, choose to handle called shots. They know that each shot is unique. You reserve the right to ruin any called shot you please. Thus, its in their interest to make the called shots interesting. If they can make your world more vibrant, you'll be able to give them more leeway to do what they want.
- Penalty on attack role - easy, and highly variable. A -1 might permit slightly abusable game mechanics, while a -5 penalty might let you end an encounter early (unless it's a boss, of course). Easy to understand, and simple for players to announce what penalty they are accepting on the called shot.
- Losses of attacks - Announce that the archer can, indeed, do "Called shot: left testicle," if he/she so chooses. However, an opening like that isn't open in every round of combat. Have the player unable to move until you, the DM, decide that called shot opens up. You might use dice to decide when that shot is available, or you might wait for the opportune plot moment. Use fluffy language to describe the combat each round so that the player has some sense of how likely the called shot actually is.
- Penalty for getting it wrong - Make it clear that announcing a called shot has a price. Consider that vain vagabond you got in a fistfight earlier. If you rely on plain 'ol dice rolls to subdue him, we can ignore his vanity. However, if you try "Called shot: not the face," we have to consider the fact that the player was thinking about where to land the blow. Perhaps a bad roll here might hit the vagabond in the face, complicating future interactions. With just dice, it was simple. The player chose to make it complicated, so now there's more complicated penalties.
One rule for this sort of play: never give the players the exact rules you use for a particular called shot. You need the freedom to be able to correct for an overpowered kind of called shot. If they know that "Called shot: head" causes dizziness on a roll of 18-20, they'll start abusing it. However, if all they know is "high rolls tend to lead the DM to claim the enemy is dizzy," then you have room to tune the ability. This tuning is both global (affecting every combat), and local (affecting just this fight -- in particular called shots vs. bosses will have to have less capitalizable effects, by necessity).