Terry returned to training with England on Tuesday and it was hoped that he would be fit in time for the crucial Wembley meeting with Croatia.
The defender has not featured for club or country since injuring a knee just a day before England's 2-1 qualifying defeat to Russia last month.
And Gerrard, who is set to stand in as skipper, has said that Terry will again remain on the sidelines.
"I've spoken to John and he is not ready for Wednesday," Gerrard told Sky Sports News.
"He is obviously disappointed not to be in the game, but he will still be there and will be a big help to all the players in the dressing room."