In September, the 37-year-old was linked with a move to Spartak Moscow, but eventually opted against moving to the Russian capital.
Terry called time on his playing career by releasing a statement on his Instagram page, thanking his family, former teammates and staff he worked with during his 23-years in the game.
Aston Villa are looking for a new manager after they chose to sack boss Steve Bruce on Wednesday following a run of just one win in nine games.
But his club career will be best remembered for his time at Chelsea where he won five Premier League titles, five FA Cups, as well as the Champions League and Europa League, although he did not play in the two European finals.
"I dearly hope that Villa can get back to where they once were as a football club".
Terry made his Chelsea debut as an 17-year-old in 1998 during an EFL Cup tie against the club he would later play for, Aston Villa.
"What I do know is that Aston Villa have good enough players to be pushing for a Premier League return and it would be a hugely exciting time for their fans". I have to say it was the most joyous I have ever felt in getting that promotion.
"Right from the outset they have given me total support, on and off the pitch, and I have a tremendous bond with them".
"It was an honour to walk alongside you at @chelseafc and see close up the sheer will and desire to be the best and also encourage the best from all around you".
"We achieved so many great memories together and I couldn't have succeeded without you". They all sided me on my way to playing 717 games for the club I love and it was a privilege to serve them as captain. "I look forward to the next chapter in my life and the challenges ahead".
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