Terry faces FA charges for allegedly using a racist slur towards Queens Park Rangers defender Anton Ferdinand last season, although a date has yet to be announced for the hearing.
The 31-year-old was rested for England's 2-1 friendly win against Italy along with a host of other senior players, but Hodgson will give the former captain a return for the World Cup qualifiers against Moldova and Ukraine.
"As far as I know, I can select him at the moment, and I will be selecting him," Hodgson said.
"I don't really have any comment about the rest of it.
"Time will take it's toll. I just know I can select him."
Hodgson will officially announce his squad on September 7.