Reports over the international break suggested that the 37-year-old will consider bringing his career to an end in the summer, regardless of what devision Villa are playing in.
Bruce is unsure whether Terry will stay on for at least another year once his existing deal expires in two months' time, though he hopes to see the club captain remain on in some capacity due to his experience.
"First and foremost, the big decision is all in John's hands and we have to respect that," he told reporters ahead of his side's meeting with former club Hull City. "All of us want him to stay but it's John's decision. Once he makes the decision, we will abide by it.
"It would be wonderful if he takes us back into the Premier League and then played a part in trying to keep us there. Whether we are in the Premier League or the Championship, it is John's call to say what he wants to do playing-wise.
"I have said to him, if we get into the Premier League we would want him to stay, because his experience would be invaluable. But we have to respect John and what John wishes. The ball will be in his court."
Terry has stared 28 of promotion-chasing Villa's 38 Championship matches this season.