His recall on a permanent basis - first revealed by Sportsmail last week - was confirmed at the weekend and Terry said: 'I never stopped hoping I'd lead my country again. Anyone who ever asks me about Fabio, I can only say good things about him.'
John Terry: Never gave up hope of winning back the England captaincy
Terry's comments came as Capello named his squad for the forthcoming games against Wales and Ghana, in which he sprang a surprise by picking Wolverhampton Wanderers winger Matt Jarvis. It is a first call-up for the 24-year-old, who scored the winner for Wolves at Aston Villa on Saturday.
Terry was cleared to join the squad and resume the captaincy despite an injury scare during Chelsea's win over Manchester City at Stamford Bridge.
England squad v Wales Goalkeepers: Foster, Green, Hart.
Defenders: Baines, Cahill, Ashley Cole, Dawson, Jagielka, Glen Johnson, Lescott, Terry, K Walker.
Midfielders: Barry, Downing, Jarvis, Lampard, Lennon, Milner, Parker, Wilshere, Ashley Young.
Strikers: Bent, Carroll, Crouch, Wayne Rooney.
With Capello looking on from the stands, Terry jarred his right knee in a collision with Yaya Toure and needed lengthy treatment before limping on to the finish.
Jarvis gets the nod in a 26-man squad ahead of Adam Johnson, who came back after an ankle injury as a late substitute in City's loss on Sunday. He is the first Wolves player to be included in a full England squad since Steve Bull in 1990.
Andy Carroll is also selected for the first time for a competitive international having made his England debut against France in November.
Terry also claimed there is no ill feeling between himself and Capello, who stripped him of the captaincy last year after lurid stories appeared about his private life.
The Chelsea defender said: 'I moved on very quickly from the decision about losing the captaincy and I've never fallen out with the manager. People look at what's happened between us and think there must be trouble, but there isn't.
'I have nothing but respect for him. Hopefully, it's the same the other way. Fabio has been great. I've got to give him loads of credit for that.'
Enlarge Main man Matt: Wolves Matt Jarvis (right) has been handed his first England call-up
Tottenham winger Aaron Lennon is included for the first time since England's game against Montenegro in October.
Everton defender Phil Jagielka is back, along with Peter Crouch, ahead of the Euro 2012 qualifier against Wales at the Millennium Stadium on Saturday.
Carlo Ancelotti confirmed Terry is fit to report for international duty, but it made for an anxious few minutes for the England manager. Having handed the captaincy back to Terry, what would happen if he suddenly lost him to injury?
'John Terry will play for England,' said Ancelotti, as he reacted to Capello's confirmation that Terry would replace Rio Ferdinand as the permanent England captain.
The Chelsea manager added: 'I think John is happy with this and so I am very happy. A man is a leader not because he has the armband on. He's a leader because he's a professional and he's at the top, like John Terry is.'
So near yet so far: Fabio Capello (bottom left with his back to the camera) and Rio Ferdinand at Old Trafford
Ferdinand is understood to be hurt by the way the captaincy was taken away from him and he and Capello again failed to meet on Saturday, despite both attending United's home match with Bolton.
Capello's squad will meet at their Hertfordshire base today. Ferdinand and Steven Gerrard are injured and unavailable for Saturday and the friendly against Ghana the following Tuesday. Theo Walcott is also missing.
Fabio Capello hands Matt Jarvis first England call-up in squad of few surprisesEngland out of respect for Fabio: Squad can't believe Terry made captainCapello faces players' fury: Rio leads stars' anger as Terry back as captainKenny Dalglish: If Terry was wrong man a year ago, why is he right now?
Explore more:People: John Terry, Glen Johnson, Fabio Capello, Ashley Young, Andy Carroll, Phil Jagielka, Theo Walcott, Aaron Lennon, Matt Jarvis, Peter Crouch, Adam Johnson, Ashley Cole, Wayne Rooney, Rio Ferdinand, Steven Gerrard, Carlo Ancelotti Places: France, Wales, Ghana, Montenegro, United Kingdom