Chelsea chairman Bruce Buck said Saturday that taking the armband off the long-serving defender would not be an appropriate punishment following long discussions with the club's hierarchy, including billionnaire Russian owner Roman Abramovich.
"John will continue to be captain of the club, Buck told talkSPORT radio. "We have taken disciplinary action and we think it is firm disciplinary action and appropriate for the circumstances."
Terry apologized Thursday for using inappropriate language during an on-field confrontation with Anton Ferdinand in a west London derby against Queens Park Rangers last October and decided not to challenge the suspension and record 220,000 pounds ($352,000) fine handed out by the Football Association for issuing a racial slur to his fellow centre back.
But Terry has always insisted he was merely repeating an accusation of racism that Ferdinand claimed Terry had made. He was cleared in a criminal court of racially abusing Ferdinand, although the FA decided to begin its own proceedings.
"We have kept in mind first of all that a court of criminal law found him not guilty," said Buck, who was with Terry throughout the trial in July. "Of course we also note the FA decision and we certainly respect that decision.
"This is not a decision we've taken lightly, it's not a decision we took in a half-hour meeting. We discussed it over a long period of time."
Chelsea chief executive Ron Gourlay said Terry fell "below the high standards we expect at the club."
"We are not sweeping this under the carpet," Gourlay added on talkSPORT. "We have had to deal with this for the last 12 months. John let himself down, he let the club down, the words were inappropriate that he used."
Buck said Terry wouldn't be given an additional suspension by Chelsea.