Terry will miss Sunday’s Premier League clash against Manchester United because he is serving the second match of a four-game suspension for racially abusing Queen’s Park Rangers defender Anton Ferdinand.
“John certainly has made many mistakes in his career, like many others, but he has also done very good things,” Watford boss Zola told the London Evening Standard.
“The problem sometimes is that it is easier to pick up on the wrong things than the right ones. I’m not saying this just because he is somebody I know and respect.
“I have no issue with him being captain — the way he conducts himself on the pitch, the bravery he shows, he is a leader. If the manager decides to keep him as captain, he can do that.
“I understand why people have that opinion [that he should not be captain] but we are talking about a person who I care a lot about, so it doesn’t come easy for me to come into it because it feels like I am judging him.
“John can be controversial but he is still a fantastic professional. He is an incredible leader on the pitch and I have to stick to that picture I have of him.”