The Chelsea captain is the big controversial selection.
Hodgson is confident Terry's court case will not be a distraction.
"No, he's had that court case hanging over him and it's not distracted him in lifting the FA Cup and helping his team reach a Champions League final," Hodgson said.
"I know how committed he is to England.
"I don't think anyone has any cause to doubt his desire and his commitment to England and his pride in playing for England."
Hodgson raised various points in a private conversation with Terry, and said: "He assured me I need have no fears or worries over any of my issues."