The Sun claims that negotiations between the club and Terry's agent have been finalised, with the England captain set to sign a new five-year contract that will earn him £6.8million a year.
The deal will reportedly make Terry the highest-paid player in England.
Chelsea owner Roman Abramovich has been keen to tie-up deals for Terry and England team-mate Frank Lampard as soon as possible this summer, and has flown out to the club's pre-season tour of America to shake hands on the deal.
The Russian is now keen to secure Lampard on an improved contract, and will try to hammer out a deal with the midfielder as soon as possible.
The pair reportedly had demanded to be put on a par with the top-earners at Chelsea, last season's summer signings Andriy Shevchenko and Michael Ballack, who are both on around £120,000 a week.
Terry, meanwhile, reportedly suffered a broken toe during Chelsea's 1-0 win against the Suwon Bluewings in California.
He is said to have played on after picking up the injury and came off at half-time in the match against the Korean side at the Home Depot Center in Carson.
His substitution at the interval appeared to have been planned as manager Jose Mourinho used 22 players during the game in order to give them all 45 minutes each.
But, according to reports, the 26-year-old had a painkilling injection and underwent scans and will be looking to return for the game against the Los Angeles Galaxy on Saturday in which David Beckham could make his American debut.
Terry has suffered a number of injuries this year and his back injury at the turn of the year was key as Chelsea lost ground on Manchester United in the Premier League title race.
England manager Steve McClaren will be keeping an eye on Terry's progress ahead of the Euro 2008 qualifiers this autumn.