He was joined in Fabio Capello's 25-man squad by Chelsea team-mate Daniel Sturridge, who has been called up for the first time. Everton's midfielder Jack Rodwell is another new face as Capello begins preparations for next year's European Championship in earnest.
Terry denied making racist comments to Queen's Park Rangers defender Anton Ferdinand, brother of England's Rio, in a Premier League match last month. Rio Ferdinand was not included in the squad.
The FA and British police are investigating the allegations made by Ferdinand but Capello said in Sunday's newspapers that the Chelsea captain was "innocent until proven guilty".
Sturridge, who has impressed this season after returning to Stamford Bridge from a loan spell with Bolton Wanderers, is one of Capello's options to replace Wayne Rooney who will miss England's group games at next year's tournament after being hit with a three-match ban for his sending-off against Montenegro.
Manchester United's Danny Welbeck was also among the strikers named along with Fulham's Bobby Zamora, Aston Villa duo Gabriel Agbonlahor and Darren Bent and Fulham's Bobby Zamora.
England face world and European champions Spain at Wembley on Saturday before hosting Sweden the following Tuesday.
Goalkeepers: Scott Carson (Bursapor), Joe Hart (Manchester City), David Stockdale (Ipswich Town - loan from Fulham)
Defenders: Leighton Baines (Everton), Gary Cahill (Bolton Wanderers), Ashley Cole (Chelsea), Phil Jagielka (Everton), Glen Johnson (Liverpool), Phil Jones (Manchester United), Joleon Lescott (Manchester City), John Terry (Chelsea), Kyle Walker (Tottenham Hotspur)
Midfielders: Gareth Barry (Manchester City), Stewart Downing (Liverpool), Adam Johnson (Manchester City), Frank Lampard (Chelsea), James Milner (Manchester City), Scott Parker (Tottenham Hotspur), Jack Rodwell (Everton), Theo Walcott (Arsenal)
Forwards: Gabby Agbonlahor (Aston Villa), Darren Bent (Aston Villa), Daniel Sturridge (Chelsea), Danny Welbeck (Manchester United), Bobby Zamora (Fulham)
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