Terry has been charged with abusing QPR's Anton Ferdinand and, when his trial date was set for 9 July, the FA decided a new captain was required.
Terry categorically denies the charge and Capello feels he is innocent until proven otherwise and has taken to Italian TV to criticise the FA's decision.
He has vowed to include Terry in his squad for the Euros, captain or not, but first he must face FA chairman David Bernstein.