The former Blues captain opened up on the West Ham star's future after the Hammers hierarchy slapped a £150million price tag on the midfielder.
Rice came through the west London club's academy, but was released at the age of 14 before he moved to east London where he has played ever since.
Now, his childhood idol, Terry, has said that a return to Stamford Bridge for the 23-year-old would be 'incredible'.
Speaking to Astro SuperSport, the Blues legend revealed his view on what Rice should do once the season reaches its conclusion.
"I'm going to get in trouble here for what I say!" Terry said.
"You know what, Dec obviously loves Chelsea - I think everyone knows that.
"I think the rejection he had from Chelsea has really helped his career actually. What he's done at West Ham is pretty much incredible.
"We saw in the FA Cup [against Kidderminster Harriers in February] when he came on and scored, and again grabbed the game by the scruff of the neck."
The former England international then went on to explain that realistically, West Ham will need to put an impressive offer on the table and bring in new recruits to hold on to their fan favourite.
"I think from Dec's side of things, I think he's given everything to West Ham," he added.
"And for me, looking from the outside, unless West Ham go and make a big statement in the summer and go and spend £100million plus and say, 'We want to keep Dec and we want to bring in top players like you', then I think he's got a decision to make.
"I think if West Ham go and spend huge amounts of money, bring in top players, then I think it's difficult for him to walk away."
Despite Terry's desire to see him in blue once more, Hammers boss David Moyes was adamant the England starter was not on the move.
Speaking to Sky Sports after the Irons' victory over Everton on Sunday, the Scot said: "If I had heard something [about Rice], I wouldn't tell you.
"But the best thing to say is that 'no we've not', and let me tell you, he's not for sale."