Terry is currently the subject of a police and FA investigation into allegations of racial abuse. Police are looking into claims the England captain racially abused QPR defender Anton Ferdinand at Loftus Road last month.
There was speculation that he would be left out of the England squad for the friendlies with Spain and Sweden, but Capello nipped that in the bud by including Terry. However, Terry will not start against Spain on Saturday - although Capello has confirmed his captain will lead out the team against Sweden on Tuesday.
Capello was put through the wringer by the media on Friday. He gave his support to Terry, but appeared flustered when asked why his captain and first-choice centre half would not start against world and European champions Spain.
"He is team leader because always he is important in the dressing room," Capello said. "He will play against Sweden, but tomorrow he will be on the bench. Like the other players, we can't play everybody. I have six substitutions."
Asked to comment on the Terry-Ferdinand situation, Capello said: "For me, John is innocent until proven guilty. Absolutely. I can't speak about this investigation."
Pressed further on Terry's absence, he said: "I decided that he will not play this game against Spain because I wanted to see something different in the two centre-backs."
That answer did not satisfy sections of the press room, drawing the following response: "Why experiment against Spain? Isn't it the wrong game in which to experiment?" Capello scratched around for an answer: "We will try to play a different style."
"Do that against Sweden," the reporter pressed, "not against the world and European champions." A flustered Capello stated: "We're playing two good teams [Spain and Sweden], two different styles, but both games are difficult." Still the questions continued: "If there were no allegations against John Terry, would he still not have played against Spain?" Appearing agitated, Capello replied: "I decided everything before what happened. I don't like to speak about it."
Finally, in response to whether Terry would lead the team against Sweden, Capello said: "Yes."
Frank Lampard will captain the side against Spain, and the Chelsea midfielder expressed his delight at the honour. "It will be my proudest moment in an England shirt I think and I've had a few, playing in tournaments, but to lead your country out at Wembley, at your home ground, is a very special moment," he said. "I'm absolutely delighted."
Asked if it was difficult to take on the captaincy for just one match before his club-mate Terry returns to the role against Sweden, Lampard said: "Not difficult at all. It's just a very proud moment for me. I've no hold on the captain's armband, I've no wishes to try and get it, I'm 33 now, I'm just very honoured to have it for the second time.
"John's the captain, it's been well stated, and he's a very, very good captain. He's coping [with everything] just fine. We've all had our moments in football, our difficult times for whatever reason, and John's a strong character - everyone knows that - and he's coped fine with that.
"I can say I've worked with John for a long time, as a professional and a friend, and he's always been fantastic. Other than that I can't comment. When he plays on Tuesday or in the future you will see the same John Terry."