Former skipper Terry, 31, has been ruled out of Tuesday's World Cup qualifier against Ukraine after suffering an ankle injury in Friday's 5-0 win over Moldova.
But Milner, who scored his first senior international goal in the rout, reckons Roy Hodgson's squad can play to the same high standards even without the experienced Chelsea captain.
"It is not going to weaken the team in any way, obviously JT (Terry) is a top player and will be tough to replace but we have got a number of top candidates who can step in," he said.
"He is a top player and we all know that and he performed well the other night and unfortunately picked up an injury.
"But I think that you can see with the strength of the squad and the players we do have, we are fortunate we have got a number of options who can step in there Jags (Phil Jagielka), (Gary) Cahill or a number of other ways the manager could go."
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The eye-catching performances of young players Alex Oxlade-Chamberlain and Tom Cleverley were major talking points following England's winning start to their World Cup qualifying campaign and Milner is confident both have what it takes to make a lasting impression on the national team.
"The squad is a great place at this moment in time - there are a lot of younger players coming in, they are very young lads now with the likes of Ox (Oxlade-Chamberlain) coming in," he added.
"To experience these games at a major tournament already is invaluable - he is a very good player and we have seen what he can do already, think how good he will be in a few years.
"Clevs (Cleverley) is a top player, very comfortable on the ball and plays great passes in that position he played the other night.
"He is a good link between the midfield and the forwards - he does his work defensively and helps keep the shape."
The Manchester City midfielder netted his side's fourth in Chisinau and admitted he was glad to finally score a senior England goal.
"Obviously what you want to do is score for your country and it has been a long time coming," he said.
"I had a couple of chances before that and hit the inside of the post and other things so it was nice to get off the mark and contribute to a good England win."
England took on Ukraine in the group stages of last summer's European Championship and Milner, who started the 1-0 win in Donetsk, thinks both sides will closely resemble the teams who lined up that day.
"It will be slightly different but the majority of the squads will be very similar," he said.
"This time it is on our home turf and we need to make sure we put in a good performance, they showed over the summer they are no pushovers - they are a strong side with a number of good players.
"We need to be on the top of our game - hopefully we can get an early goal again, settle down and play some football."
A similar performance to the first-half showing in Moldova would put England in a great position to win their opening two qualifiers but Milner has urged the team to improve on their showing in the second half.
He said: "I think overall it was a very good performance - it was a good test for us and one we were expected to win and we did that.
"I felt first-half we performed very well and there were a lot of positives and we looked very dangerous and moved the ball very well - second-half we took our foot off the gas a bit and looked a bit sloppy at times."