The Villans recruited the services of the 37-year-old former England international central defender following his departure from Premier League club Chelsea at the end of the 2016-17 season.
Cotterill told The Birmingham Mail: “Steve Bruce has done a good job there and bringing John Terry into the dressing room, I think has been vital for him. Obviously him coming back into the team has coincided with their good form again.
“We were mooted to be looking for John’s services and obviously he decided to go to Aston Villa at the time.”
Terry has had injury issues at Villa this season, but the 37-year-old’s performances for the Villans have been encouraging.
The centre-back has scored one goal in 20 Championship matches for Villa so far this campaign.
The five-time Premier League and one-time Champions League winner has brought to Villa his vast experience and a winning mentality.
Terry is likely to start for Villa against Birmingham at Villa Park in the Championship this afternoon.
The Villans, who are aiming to finish in the top six of the Championship this season, will head into the Second City derby as favourites.