Blues boss Villas-Boas reiterated his full backing for Terry amid the Football Association and police probes into whether the England skipper racially abused QPR defender Anton Ferdinand during Sunday's Barclays Premier League game at Loftus Road.
"I see no reason why not," Villas-Boas said, insisting he had no fears about Terry playing.
"Not in the sense of his state of mind - never."
Villas-Boas also denied the saga had been a distraction for his team as they look to close the six-point gap to Manchester City at the top of the Premier League.
"I don't think, for us, it's been a distraction. We haven't lost too much focus on the situation because there is nothing to lose focus on," said Villas-Boas, whose side beat Everton in the Carling Cup on Wednesday night without Terry after losing to QPR on Sunday.
Villas-Boas reiterated that the race row had all been "a big misunderstanding".
Asked if it had become a wider issue than Terry's word against Ferdinand's, he added: "I don't know what it's become. For me, it's the end of the matter and it's under FA investigation and hopefully we can put an end to it."
The Terry-Ferdinand controversy erupted just eight days after Manchester United defender Patrice Evra accused Liverpool's Luis Suarez of racially abusing him during a match. Suarez denies the accusation. While maintaining Terry's innocence, Villas-Boas admitted more did need to be done to tackle racism in English football.
"We have done throughout the years the correct measures to try to ban it," he said. "The governing bodies should continue to be aggressive in banning it. The correct progress has still to be made in some aspects and we hope we can evolve from that."
Source: PA
Source: PA