The Blues veteran was impressed by the young England forward last season and, although Sterling and Liverpool's actions in the build up to his exit from Anfield attracted criticism, Terry feels that his forcing through a move to a Champions League team is understandable.
"Sterling was one of the best players I came up against last year. He caused a lot of problems and I think he is going to be a big player for them," the Chelsea defender told the press.
"It is a lot of money but what other English player could you go out and buy? For me, he was one of the best players in the league.
"There were things that he did not perhaps handle well but he is a young kid who wants to play right at the very top and, through no fault of his own, he has had to go and do that at Manchester City because Liverpool did not make that grade last year.
"So I understand where he has come from and wish him well because I think he's a top English player. Forget the money."
The defender then went on to discuss his team's performances last season but insists they must be ready for a touch challenge next term.
"I thought the way we played and the way we won [the Premier League], staying top all year, showed how good we were.
"I think a lot of our rivals needed to strengthen and they have done that and I think they will come back a lot hungrier, ready and believing they can catch us and even overtake us.
"Yes, I think we forced other clubs to step up and maybe clubs have had to put £5m more on players than they thought they had to because how good we were last year has forced them into that."
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