Dawson produced a commanding performance in England's 2-0 win over Wales as he deputised for the injured Rio Ferdinand in their Euro 2012 qualifier at Cardiff, with Frank Lampard (penalty) and Darren Bent on target.
The Tottenham man is facing competition at the back from the likes of Phil Jagielka and Joleon Lescott and, when he is fit again, deposed skipper Ferdinand.
But Terry said: "There is a lot of competition at centre-back but Michael has made the position his own really.
"In the Champions League he has been really good for Tottenham this season and maybe that is the key for him as well.
"Playing in the big competitions against the big players can only help anyone as a player. Michael has certainly done well in the last couple of games for England."
Source: PA
Source: PA