The Blues are in real danger of failing to earn a place in Europe's premier club competition for the first time in the Roman Abramovich era.
They lie fifth in the Barclays Premier League, while they are favourites to crash out of this season's Champions League tonight when they play Napoli in their last-16 second leg.
Captain Terry acknowledged that Chelsea could ill afford to spend a year outside Europe's elite if they are to continue to attract top players and adhere to UEFA's Financial Fair Play regulations.
He said: "We need Champions League football financially, and also to attract the best players.
"So we need to be in the competition next season.
"We understand as a group what we need to do to ensure that happens, and we'll do everything we can to make sure it does happen."
Terry insisted there was no need to tell his team-mates to "man up" ahead of tonight's do-or-die Napoli clash.
A little over a year ago, Terry did just that ahead of his side's last-16 tie with FC Copenhagen.
But he said last night: "There's no need for me to come out. We know what we need to do.
"As a group of players and a club, we should be in a better position - even in this tie."
Chelsea are looking to become only the fourth club to overturn a first-leg deficit of two goals or more in the Champions League.
The Blues were written off by some after their defeat in Naples three weeks ago and Terry admitted reaching the quarter-finals would represent one of his greatest achievements.
"If it all goes well, it could go down as one of the great nights of Chelsea's history," said Terry, who was under no illusions over the task at hand.
The 31-year-old also accused Wojciech Szczesny and Luiz Felipe Scolari of talking "complete nonsense" about the Chelsea dressing room.
Arsenal goalkeeper Szczesny last week claimed Villas-Boas' sacking proved the Blues' England players effectively ran the club.
Former Chelsea boss Scolari also warned Villas-Boas' successor "hell" awaited him because of the influence of the squad on owner Roman Abramovich.
Blues captain Terry hit back, saying: "People speculating from various different clubs or previous managers, that's complete nonsense."
Meanwhile, Napoli were determined not to fall into the same trap Arsenal sprung on AC Milan last week.
Walter Mazzarri's men were given a real wake-up call last week when the Gunners almost overturned a 4-0 deficit against Milan.
Arsenal's 3-0 win was not far from Mazzarri's mind as he prepared his side for their biggest European match for more than two decades.
He added: "When we don't have the ball, we must be like 11 lions, attacking them constantly to get it back.
"When we have the ball, we must do everything we can to put them under pressure."