The FA's decision came despite the Westminster Magistrates' Court clearing Terry of all charges in July, and Eriksson is "upset" at how the whole issue has been handled.
"It is obvious John should be punished if he's expressed himself so inappropriately," said the Swede. "I refuse to believe [Terry] is a racist. What makes me upset is the FA punishment has come after a year.
"I honestly think the FA – and civil courts – have handled it in a miserable way.
"It has obviously had a major impact and he has quit England. I suppose it was a kind of protest against the FA."
Eriksson coached England from 2001 until 2006.