Villa had been searching for a new centre back earlier this summer as manager Steve Bruce pursued a partner for James Chester - and he landed one of the coups of the summer so far.
Some strong performances for Villa last season showed his potential, however the United loanee was also guilty of high-profile mistakes that had the Midlands fanbase questioning him at times.
He wore the captain band for the first time on his Villa debut in Saturday's pre-season friendly defeat against Shrewsbury.
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Villa fans - are you happy with your new signing?
However, they lost to a side a division below, Zak Jules and Arthur Gnahoua goals - both coming after Terry was subbed off around the hour mark - earning the Shrews a 2-1 victory, Henri Lansbury netting a late penalty for the visitors.
The veteran defender joined Villa after leaving Chelsea at the end of last season following a successful 22 year spell with the club.
The stopper spent the second half of last season with the Villa Park outfit, starting 21 games for the Championship club in the process.