Capello to decide on Terry future
The Chelsea defender has been the subject of intense media speculation for three days after an interim injunction he brought against a newspaper was lifted by a High Court judge last week.
In a statement on its website, the FA said: "Fabio is fully up to speed with developments regarding John Terry.
"He spoke with our chairman Lord Triesman and chief executive Ian Watmore today, who both backed him to make the best decision for England on footballing grounds.
"Fabio is dealing with the matter in his own way using his extensive experience as a football manager," the statement read. Capello returns to England this week before travelling to Warsaw for Sunday's Euro 2012 qualifying draw.
England's next fixture is a friendly against African Nations Cup winners Egypt at Wembley Stadium on March 3.
Terry is expected to captain England at the World Cup in South Africa in June.
He put his troubles behind him on Saturday when he headed Chelsea's winning goal in their 2-1 victory at Burnley where he was jeered and booed by the home fans every time he touched the ball.