The Stamford Bridge club currently sit in fifth place in the Premier League table, and after a 1-0 defeat to West Brom on Saturday Roman Abramovich gave their Portuguese coach the axe.
However, Terry has pinpointed poor performances from the players as a key reason for Villas Boas being dismissed.
“Sad for Andre, because unfortunately it falls on his head, when I think the players would hold their hands up and say, ‘Clearly, we’ve not been good enough and we all made mistakes together’,” he told Chelsea TV.
“He’s the man whose head’s on the block and unfortunately goes.”
The Blues have appointed Roberto Di Matteo as interim manager until the end of the season, with fellow former midfielder Eddie Newton joining the coaching team to help, and the Italian got off to a good start with a 2-0 win over Birmingham on Tuesday night in the FA Cup.
Terry feels Di Matteo and Newton will understand the club’s plight having played for Chelsea, and is motivated to have a successful end of season.
“We dug deep for him, for Robbie as well taking charge, Eddie coming in as well – it’s nice to have familiar faces around who know the club.
“We’ve done enough talking amongst ourselves over the last three or four months. Robbie came in and said those exact same things as well.
“He’s been here, played here, the same as Eddie. We have to fight for the shirt and that was the message to the lads,” he concluded.
By Gareth McKnight