Terry, 31, is accused of calling Anton Ferdinand a "f****** black c***" during a Premier League match on October 23 last year.
At Westminster Magistrates' Court, prosecutor Duncan Penny said he had "snapped" over Ferdinand's taunts about his alleged affair with former team mate Wayne Bridge's ex-girlfriend.
He said: "You're not a racist are you? But you used racist language because you snapped and it was instinctive. You were fed up with people abusing you over the issue with your wife."
Terry replied: "It was almost two years on and I had heard it a million times before. If I was going to snap, I would have snapped long before."
He agreed that he had been "stitched up right and proper" by the allegations.
Terry claims he was sarcastically repeating the words that QPR centre-half Ferdinand mistakenly thought he had used at the match at Loftus Road. He denies a racially-aggravated public order offence.
Mr Penny asked why, on Terry's account, he had repeated the racial abuse. The prosecutor said: "You said that your response was to repeat back 'a black c***', or 'calling me a black c***?' How about 'what?' Straightforward, 'what?'"
Terry replied: "At the time I was shocked and angry. I had never been accused of it on a football pitch and repeated it back." He added: "Hindsight's a wonderful thing. At the time I was shocked, I was angry, you can't control your emotions."
The defender said he would have repeated the word "n*****" back if it had been used. Earlier the father-of-two, wearing a dark suit, said he would be goaded about the alleged affair with Vanessa Perroncel at "more or less every game". But he said he would "just laugh it off basically".
Source: PA
Source: PA