Terry left Stamford Bridge after 22 years' service in June 2017 for a season-long stint with Aston Villa and rejected a move to Spartak Moscow this week.
The 37-year-old defender was believed to have been offered a wages in the region of 3 million pounds ($3.9 million) for a one-year deal.
John Terry signed a one-year contract on a free transfer for second tier side Aston Villa on Monday.
It is Chelsea's second league title win in three seasons, their sixth in total, and comes at the end of former Juventus and Italy coach Antonio Conte's first season as manager.
Despite being Chelsea's captain, John Terry has become an increasingly peripheral figure under Italian manager Antonio Conte and has made just five league appearances so far this season.
John Terry has agreed to extend his 21-year stay with Chelsea by at least another season
John Terry, who was scheduled to leave Chelsea F.C following the end of the season, has announced that he would like to stay in the club after they offered him a new contract.
John Terry, who has spent his entire senior club career with Chelsea FC, was out of contract at the end of the current season
John Terry was injured in a Premier League match against Newcastle United last Saturday and missed Chelsea F.C's Champions League loss to Paris Saint-Germain on Tuesday.
Chelsea F.C. captain John Terry, 35, limped off injured towards the end of the first half of Saturday's 5-1 Premier League win over Newcastle United F.C.
Robbie Savage was critical of John Terry's performance in Chelsea's 2-1 loss to Leicester City in December.
Chelsea F.C. are now unbeaten in nine games in all competitions under interim manager Guus Hiddink since the Dutchman took charge following Jose Mourinho's sacking in December.
Chelsea F.C. have not offered John Terry an extension to his contract which expires at the end of this season.
John Terry, 35, announced on Sunday that he will leave Chelsea F.C. when his current deal expires at the end of the season because the Premier League club had not offered him a new contract.
John Terry, who served Chelsea F.C. since the age of 14, was told that the club would not be renewing his contract next season.
The normal order of things in the English Premier League has been turned upside down this season, with the likes of Leicester City and Crystal Palace challenging at the top of the table and Chelsea F.C. languishing near the bottom three.
Chelsea manager Jose Mourinho has no doubts a patched up central-defensive pairing of Gary Cahill and Kurt Zouma can keep Tottenham Hotspur forward Harry Kane quiet if captain John Terry is unfit for the English Premier League clash.
Chelsea manager Jose Mourinho blamed the pitch for the ankle injury which is expected to prevent captain John Terry from playing in Sunday's English Premier League match against Tottenham Hotspur.