The wrong result would have wrecked the Chelsea defender's England career, destroyed his reputation and potentially cost him a fortune in sponsorship and other deals.
But instead, he walked out of Westminster Magistrates' Court with a not-guilty verdict, though without the full backing of some footballing figures.
The 31-year-old was acquitted of a racially aggravated public order offence by Chief Magistrate Howard Riddle at Westminster Magistrates' Court.
It was alleged that he had called Anton Ferdinand a "f****** black c***". But Terry claimed he was sarcastically repeating a slur that the QPR defender mistakenly thought he had used during a Premier League Match last year.
After the verdict, Chelsea chairman Bruce Buck said: "We are pleased that John can now put his mind to football and go back to training and do what he's done for many years."
Dan Morrison, Terry's lawyer, issued a statement saying: "He did not racially abuse Mr Ferdinand and the court has accepted this."
The Football Association said it will now "seek to conclude its own inquiries" into what happened, but Paul Elliott, an ambassador for anti-racism campaigners Kick It Out, said the whole episode had painted football in the worst possible light.
The former Chelsea player said: "There's no winners in this situation. Football's a wonderful way for people to express themselves, break down barriers, challenge a lot of areas around all forms of discrimination and prejudices so it's very sad we're here witnessing this sad and sorry outcome."
Former footballer and BBC presenter Garth Crooks said Terry should still face action from the FA. "I believe it was wrong of him to say these words under any circumstances - and though Terry has been found not to have committed a criminal offence, the FA must now decide whether the former England captain should be charged for contravening its own rules."