The coach stripped Terry of the captaincy last week following newspaper allegations surrounding his private life.

But the Italian said: "John Terry is still an important player for England. He is one of the most important players for England."

The backing seems to end any worries Terry may have had about his future in the team in the run-up to this summer's World Cup.

Capello has shown a reluctance to talk about the issue after making the decision to replace the 29-year-old with Rio Ferdinand on Friday.

And he said yesterday: "It is all over, it is finished, it is time to move on."

Terry was back in action yesterday for the first time since losing the England captaincy, turning in an impressive performance as he skippered Chelsea to a 2-0 victory over title rivals Arsenal.

Terry was barracked by Gunners fans about Capello's decision and about newspaper allegations that he had an affair with the former girlfriend of Wayne Bridge, his friend and England team-mate.

After the match, in which he set up Didier Drogba for the first of his two goals, Blues boss Carlo Ancelotti sang his praises.

"John is the perfect captain for Chelsea," said the Italian.

"My captain has a fantastic attitude. He is doing very well in every game.

"It is very important for the team to have this leadership. He was always in control of the game. He has a strong mentality."