The footballer will feature in a raft of promotional activity including a TV advertising push for the UK brand, which is set to launch ahead of this June's World Cup.
Will King, King of Shaves founder, said: "This is the biggest, most exciting deal any brand could secure, particularly just before the World Cup."
The TV ad is being filmed this week in London just days after Chelsea crashed out of the FA Cup, losing 2-1 in a semi-final clash on Saturday against Liverpool.
The TV creative for the campaign, called "Be" and set to run until the end of the year, has been created by Big Communications and will be backed by cinema, press and podcasting promotional activity.
In addition to the World Cup activity, Terry will also endorse the brand with further campaigns through to the end of the Euro 2008 event.
King added: "We believe John Terry's endorsement brings great stature and credibility to King of Shaves, and will drive consumer awareness and sales of the brand to completely new levels."
This latest move for Terry signals what could be a string of deals for the Chelsea captain, who is tipped to be one of the stars of the World Cup.
He is already one of England's most recognisable footballers, last year winning the Professional Footballers Association player of the year gong and next week he is due to speak at the Oxford Union, alongside former Arsenal captain turned broadcaster Ian Wright.
Other advertising to feature Terry, who captains Chelsea, includes Pepsi's current £7m campaign to promote its Pepsi Max brand. The push, with the strapline "What's in your locker" includes a TV ad with 21 past and present England footballers, featuring David Beckham, David Platt and Chris Waddle, among others alongside Terry.
Although substantial, Terry's King of Shaves deal is still fall far short of the £33m that David Beckham reportedly nets for appearing in advertising for US-owned shaving giant Gillette.
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum.