Terry played under Mourinho during the Portuguese coach's two spells in charge of the Blues, winning three Premier League titles together.
The incident occurred midway through a training session after Terry and his Chelsea teammates were instructed to do a drill.
However, the performance of the Blues' centre-back partnership left a lot to be desired, with Mourinho calling the pair out in front of the entire squad.
"I remember we'd won the league one year at Chelsea and me and Gary Cahill came back in pre-season, " Terry told John Obi Mikel's new podcast show entitled The Obi One Podcast.
"At the time we didn't realise why he'd done it, but we'd signed a few new big players and we did this possession game where me and Gaz played the ball into midfield. There's no space to play it into midfield but you have to go through midfield to get into the other third.
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"Me and Gaz are feeding it, it's getting intercepted, we're conceding goals and he's [Mourinho] stopped the session," Terry recalled.
"I'm captain, Gaz is vice-captain and he says: 'See you two, you can f*** off.'
"I'll go and sign [Raphael] Varane and I'll sign another top defender in the world and spend £100m and you two can sit on the bench and watch them.
"Me and Gaz were like, 'f****** hell we won the league last year'. We couldn't believe it. Me and Gaz looked at each other and said 'right, game on'.
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"For the rest of the session, all me and Gaz did was kick absolute lumps out of everyone.
"Afterwards he put his arms around me and Gaz walking off the pitch and went 'that's why you're my captain and vice-captain."
Terry spoke fondly of his time working with Mourinho claiming the Portuguese is was key to his success at club level.
"He was and still is the best manager I've ever worked with, Terry added. "I'm not sure I'd get to the levels I have done without him. He knew exactly what buttons to press with me and like other players have said, one day you don't know what you're gonna get.
"He'll ignore you and other days you'll get an arm around the shoulder, you'll get a text message when you're at home.
"He pushed my buttons every single day he just drained every last little drop out of me and I'm so grateful to have had him as a coach."
When asked if Mourinho gave him the jitters, Terry said: "Oh my god, I was petrified of him. I'm still petrified of him now!
"If I saw him now, honestly, I'd be really nervous."