Terry is accused of branding Queens Park Rangers player Anton Ferdinand a “f****** black c***” during a match between Chelsea and QPR on October 23 last year.
Terry, standing trial at Westminster Magistrates Court in London, denies committing a racially aggravated public order offence. He has told the court he was sarcastically repeating words he thought Ferdinand had said to him.
Left-back Cole, taking the witness stand, said the allegations should not have been taken to court.
“I think we shouldn’t be sitting here,” said Cole, who is mixed-race.
While racism should never be tolerated, “If I repeated something that I thought you said, that’s totally different than if someone just says something,” he told the court.
He said Terry was an inspirational captain and one of the best because he remained cool, calm and collected when others might not.
Cole said Terry had never reacted to taunts on the pitch about an alleged affair with the mother of the former team-mate’s child.
The defender said he was friends with both Anton Ferdinand and his elder brother Rio, the Manchester United and England centre-back.