In his press conference ahead of England's Euro 2012 qualifier against Wales on Saturday, Capello faced a grilling from an English press that has been highly critical of the chain of events that resulted in Terry taking the armband back.
Rio Ferdinand is said to be angry that news of Terry's reinstatement was leaked to the media, with Capello taking the decision without previously informing the man who he appointed captain in the wake of Terry being stripped of the honour in February 2010.
Having been strongly criticised for his actions, Capello did admit that he could have approached the matter with more tact. The England manager also said he is yet to speak to Ferdinand.
"Look, it could have been done something better but it is the past," Capello said. "I respect the players, I respect all the people and sometimes I regret what really happened, but it's possible to do something better."
Capello reiterated that he took the decision in a friendly against Denmark in February as a succession of players, but not Terry, took the armband. Terry was originally stripped of the honour following allegations of an affair with the former partner of then England team-mate Wayne Bridge.
"Something happened in my mind when I saw the armband being passed around during our game in Copenhagen (against Denmark),'' he said. "We changed it in the second half and it was unfair for John Terry to see this.
"I thought that it was time for John Terry, after punishment, to return and be captain. I know that Rio Ferdinand and Steven Gerrard are not fit. I knew it was the moment, with one game which is so important, to have one captain like John Terry.
"I tried to meet him (Ferdinand) when Manchester United played against Marseille but he told me no. I can understand everything, but I need to make decisions. I think I will be happy and will meet him (Ferdinand) in the future."
Pushed further on his failure to speak with Ferdinand before stripping him of the captaincy, despite the two both attending the Manchester United v Marseille game in the Champions League, Capello said: "It didn't happen, he didn't come, okay? It is a question for him, not for me. I was in the directors' box, so you have to ask him."
Capello also confirmed that Arsenal's teenage midfielder Jack Wilshere will make his first competitive start against Wales in Cardiff, although Liverpool striker Andy Carroll is not fit enough to play 90 minutes.
"I can tell you that Wilshere will start tomorrow," Capello said. "He is one of the young players who has improved more in a really short time. At the start he was a young player, and interesting player. When he played the first game with us he played 15 minutes at Wembley. He was good but he was young.
"Now he is playing like a player that played a lot of games, like a player who is 28, 29. I saw the game that he played against Barcelona and he played a fantastic game, with personality, also without fear. It is not easy to find a player like him without fear in a stadium like Barcelona's stadium - the Nou Camp.
"I spoke also with Arsene and he told me the same. He (Wilshere) surprised also him that Wilshere improved so well in a really short time."