The 28-year-old was cautioned after flinging himself at Reds goalkeeper Jose Reina, attempting to win the ball ahead of the Spanish glove-man.
However, the Blues' defender only succeeded in clattering into the stopper, leaving them both in an agonising heap.
Terry believed he had every right to challenge Reina for the loose ball, and criticised Rafa Benitez's players after full-time for encouraging the match official to book him.
However, Larsen is adament the challenge was worthy of a yellow card. “Of course he is a little bit bitter,” he said. “He will miss the return game, but he could have avoided running into the keeper on purpose.”
“This was purely calculated and I have no doubts I have made the right decision."
Fortunately for Terry, his absence may not be as crucial, with Chelsea heading into next week's tie with a 3-1 advantage courtesy of a Branislav Ivanovic brace and another goal from Didier Drogba, after Liverpool hit-man Fernando Torres had opened the scoring.
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