He fought of competition from team mates Frank Lampard and Petr Cech as well as Arsenal striker and last year's winner Thierry Henry, Liverpool midfielder Steven Gerrard and Crystal Palace striker Andrew Johnson for the prestigious award.
"It is unbelievable and the ultimate accolade to be voted for by your fellow professionals whom you play against week-in and week-out," Terry was quoted as saying by the BBC.
"You just go out there and try to give it your best, and for them to show their appreciation and vote for me is fantastic."
The England defender has been in imperious form this season as Chelsea head for their first league title in 50 years and he has also been instrumental in leading his side to the Champions league semi-finals.
His last ditch tackles and positional sense have been complemented by a decent eye for goal with Terry scoring eight times this season.
Terry is the first Chelsea player to receive the award and the first defender to win since Paul McGrath in 1993.
Manchester United striker Wayne Rooney was also named young player of the year on the day he scored one of the goals of the season in his side's 2-1
The 19-year-old was a revelation for England at Euro 2004, netting four times.
Rooney took the accolade ahead of team mate Cristiano Ronaldo, Chelsea's Dutch winger Arjen Robben, England and Tottenham Hotspur striker Jermain Defoe, Middlesbrough winger Stewart Downing and Manchester City and England wideman Shaun Wright-Phillips.
Terry becomes the first Englishman to win the senior award since Teddy Sheringham in 2001.
He had been favourite to win along with England midfielder Lampard, who finished second in the voting but still has a chance of claiming the Football Writers' player of the year.
If both Chelsea men win the two awards it will be the first time in 13 years since Gary Pallister and Gary Lineker that two English players have picked up both gongs.
Henry was third in the list voted for by fellow professionals.
Four Chelsea players were also chosen in the PFA Premier League team of the year.
Team: Petr Cech (Chelsea), Gary Neville (Manchester Utd), John Terry (Chelsea), Rio Ferdinand (Manchester Utd), Ashley Cole (Arsenal), Shaun Wright-Phillips (Manchester City), Steven Gerrard (Liverpool), Frank Lampard (Chelsea), Arjen Robben (Chelsea), Thierry Henry (Arsenal), Andy Johnson (Crystal Palace)