Terrell will take up the role on 2 January, along with another new board member: John O’Reilly, former managing director at Coral Interactive. They will be joined by Betfair’s former chief operating officer Mark Brooker in April.
After three years with the retailer, Terrell left Tesco at the start of October. A Tesco spokesman said he had decided to "pursue a different direction in his career".
Before becoming chief customer officer, he was Tesco’s interim UK managing director and group multichannel director. Before Tesco he was multichannel director at House of Fraser.
He has also been managing director of John Lewis Direct, chief operating officer of online lingerie retailer Figleaves.com, and between 1999 and 2005, UK managing director of Amazon.
William Hill is Terrell’s second new non-executive director role since leaving Tesco; last month, he also joined the board of homeware retailer Wilko.
Gareth Davis, chairman of William Hill, said: "These appointments significantly enhance the Board’s digital, multi-channel and gambling industry experience. John’s, Robin’s and Mark’s collective expertise will strengthen the business as we implement our strategy of digital and international diversification."