Terry, 38, is set for an emotional return to Stamford Bridge tomorrow night when Dean Smith's side visit the Blues in the Premier League.
“Frank has done unbelievably well since he has come in," he told Dubai Eye.
"The expectation level at the start wasn't there but I think that has helped him as well.
“The whole football club has been lifted now because they know if they're good enough under Frank and [assistant] Jody [Morris], they're going to get a chance. It's excellent. It's what the fans want to see.
“For so many years, I was really the last one to come through [the Chelsea academy]. Frank will be watching every under-23 game, every under-18 game. The staff will have their fingers on the pulse and making sure, after an under-23 game, they're in the dressing room telling the boys, 'You're not good enough' or 'You're with me in training next day'. The impact that has on the academy is incredible.
“Chelsea seem to be loved by a lot of people for the first time since I've known it. They are likeable. It's great to see players get the opportunity."