With a place at next summer's finals already secured, an experimental Three Lions side earned a 3-0 win over Belarus on Wednesday night to complete their qualification campaign with a record of nine wins out of 10 games.
The scoreline flattered Fabio Capello's England against their minnow opponents, but the Italian had used the opportunity to observe the ability of a number of his fringe players.
Terry, though, believes that even a full-strength side needs to improve before travelling to South Africa in 2010 in order to compete with the likes of European champions Spain.
The Chelsea defender told Sky Sports News: "I think when you look at the likes of Spain and the top sides across the world, we have got maybe another 20 or 30 per cent to go.
Minor adjustments"But I think we can do it. We have had a very good campaign. Nine wins out of 10 is a good start to where we want to be.
"We have got a few friendly games coming up before the World Cup gets going so, with a few minor adjustments and players fighting for position, it is good at the moment."
Peter Crouch underlined his credentials as he scored twice against Belarus, with a Shaun Wright-Phillips goal sandwiched in between, and earned praise from Capello.
The lofty Tottenham striker's display was also hailed by international team-mate Frank Lampard, who said: "He is a regular scorer. Every time he plays for England he seems to score.
"It is great to have that competition up front. He has come in with a chance and has done his stuff.
"He is a very different option for us. He is very good in the air, but also very good with his feet. Plus, he scores goals."