Terry had been charged with a racially aggravated public order offence following a Premier League game between the two clubs at Loftus Road on 23rd October last year.
Chief magistrate Howard Riddle cleared the 31-year-old of a racially aggravated public order offence at Westminster Magistrates’ Court.
Giving his verdict, Mr Riddle said the case was not about “whether Mr Terry is a racist in the broadest sense of the word”.
He said he had heard a great deal of evidence to show that he is not.
“It is understandable why Mr Terry wants to make this point, his reputation is at stake,” he said.
Terry left the court within minutes of the verdict. Looking impassive, he was escorted by aides past the media scrum.
He made no comment but was cheered by a small group of Chelseahttp://static.lingospot.com/spot/image/spacer.gif” > supporters as he was driven away.
The Crown Prosecution Service defended the decision to prosecute the former England captain.
Alison Saunders, chief crown prosecutor for London, said: “The very serious allegation at the heart of this case was one of racial abuse.
“It was our view that this was not ‘banter’ on the football pitch and that the allegation should be judged by a court.
“The Chief Magistrate agreed that Mr Terry had a case to answer, but having heard all of the evidence he acquitted Mr Terry of a racially aggravated offence.
“That is justice being done and we respect the Chief Magistrate’s decision.”