Reports had claimed that Terry had been impressed playing alongside Grealish last season, so much so that he may have convinced Chelsea to make a move for the 22-year-old this summer.
But Terry has ended those rumours, after commenting on Villa's Instagram post confirming James Chester's position as captain this season.
"Congrats Skip @jameschester23 delighted your staying mate we need you," Terry wrote.
"and just to clarify I haven’t had any conversations with Chelsea regarding Jack, we all know he is good enough to play in the Premier League but we all want to see him do that with @avfcofficial come on boys good luck this season UTV."
Chester forged a strong partnership with the former England captain during the veteran defender's spell at B6 last season, with Terry also taking Grealish under his wing.
Spurs have been heavily linked with a move for the attacking midfielder, but Steve Bruce has claimed that he won't be forced to sell his prized assets following fresh investment.