The Blues finished sixth in the Premier League table last year, which would have resulted in the side failing to qualify for Europe's elite competition this campaign.
However, the Londoners beat Bayern Munich in the final of the tournament to earn qualification for the Champions League this term, and Terry is adamant that Chelsea must again make the competition next year.
"Champions League football is a must next season," said Terry.
"We saw last season, going to the Champions League final, suffering with all the extra games and we ended up finishing sixth last season.
"It's difficult, but we have a squad and we have to step up."
The Blues were knocked out of the Champions League in December.