The England international has come under criticism in recent months after he appeared in court on a racially-aggravated public order charge for allegedly racially abusing Queens Park Rangers defender Anton Ferdinand in a Premier League match last October.
Terry was acquitted but all eyes were on the former England skipper last weekend when Ferdinand refused to shake hands with the centre-back before Chelsea's goalless draw with QPR at Loftus Road.
"As a personality, John Terry is one of the best players that I have met," Ancelotti told Goal.com. "He is a really strong character and has real quality. He gives everything for the club, not just for himself, and he was a fantastic captain for me too."
Meanwhile, the Blues are preparing to go up against Juventus in their first group game of the Champions League as they attempt to defend their title.