Terry's career at Stamford Bridge spanned across 19 years and he won five Premier League titles as captain of the club.
Former Liverpool man Carragher played against Terry and alongside him with England and for his money, no other defender compares.
He told talkSPORT: "For me he was the best centre back of the Premier League era. He was my type of player. He was basically a better version of me to be honest.
"I think his football ability is massively underrated. He was a great player.
"When I was going through my list I didn't have an English player and I wanted to get someone in there and I thought I'd go for John Terry as I couldn't get Stevie [Gerrard] in!"
"He could switch the ball 40/50 yards on his left foot. I always felt it was John Terry who was the defender and Rio Ferdinand was the footballer, but Rio was a much better defender than he was given credit for and I think John Terry was a much better footballer than he was given credit for."
As well as five Premier League titles, Terry won the FA Cup five times, the League Cup three times as well as the Champions League and Europa League once each.
While Terry is regarded as one of English football's greats, the appreciation doesn't seem to extend abroad.
Over 130,000 votes were cast in poll as Marca readers were asked to name the best ever central defender from nine candidates.
Terry's one-time partner in defence Marcel Desailly made the list but there was no space for 'JT.'
Sergio Ramos crushed the competition to come out on top with a staggering 74 per cent of the vote, a whopping 56 per cent more than Franz Beckenbauer.
"Ramos' century of goals took him one step closer to legendary status, and for the readers of Marca, that already seems to be the case," praised the outlet.
"His raft of major titles won - La Liga, the Champions League, the Copa del Rey, domestic and European Super Cups, and the World Cup - as well as his decisive influence on important matches, make him worthy of being discussed as the best central defender of all time."
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