Discussions have already taken place within the FA over what is certain to be a hotly-debated issue. But the England management have been assured by chairman David Bernstein that the choice of England captain is entirely Capello's call and he will be supported in whatever he decides.
The Italian is now poised to make the most controversial decision of his England career by bringing the Chelsea captain back in from the cold.
Read Martin Samuel's commentary on Fabio Capello's big decision: It was RIGHT to strip Terry of the armband. but now time is RIGHT to give it back to him
Friends reunited? England boss Fabio Capello (right) wants to reinstate John Terry (left) as his skipper
Steven Gerrard was ruled out of the match at the Millennium Stadium on March 26 following hernia surgery this week and Rio Ferdinand has played only one game since January 16.
Yet Capello does not see Terry as merely a short-term appointment and is said to be increasingly of the view that he remains the team's natural leader. The feeling is Terry might not be a stop-gap but a permanent choice, going through to Euro 2012.
Wearing the armband: but Rio Ferdinand has only captained England on four occasions since replacing Terry due to his persistent injury problems
Capello stripped Terry of the captaincy last February, upset by a series of controversial incidents involving the player.
Yet he has been encouraged by the way Terry has conducted himself since and thinks losing the captaincy of his country for a year is punishment enough.
The manager is also taking into account the serious nature of the match in Cardiff, a game England cannot afford to lose after the home draw with Montenegro.
It shows the depth of Capello's concern on the issue that he would be prepared to make this U-turn, having all but ruled out Terry as a captain while he remained as manager.
Interviewed on February 27 last year, the Italian said: 'Until the World Cup, Terry will not be captain again. After the World Cup, if I remain as manager, I think not.'
Since then, Terry has been very publicly snubbed. Speaking earlier this season, he complained that he felt humiliated as the armband was passed around several team members in a friendly with Egypt last March.
'I felt, "OK, I've been stripped of the captaincy, but don't take the p*** out of me",' said Terry. 'I think they would have given it to one of the stewards ahead of me.'
Even in last month's friendly victory over Denmark, Terry continued to be overlooked when substitutions saw the armband journey from Frank Lampard to Gareth Barry.
Out of action: Steven Gerrard (left) skippered England in the World Cup last summer, but will miss the Euro 2012 qualifier against Wales on March 26 through injury and Capello is still unsure about his leadership skills
Yet it would appear Capello has been agonising over the captaincy issue for some time and is leaning to a return to his original choice.
Since succeeding Terry as captain, Ferdinand has been available to play for England only four times. Although Gerrard captained England in the World Cup, Capello has never been wholly convinced of his leadership qualities.
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Explore more:People: John Terry, Fabio Capello, Rio Ferdinand, Gareth Barry, Frank Lampard, Steven Gerrard, Martin Samuel Places: Cardiff, Egypt, Montenegro, Denmark, United Kingdom, Wales