The former England captain was selected for his club two days after the FA found him guilty of racially abusing Anton Ferdinand in the QPR v Chelsea match at Loftus Road in October 2011.
Terry is waiting for the reasons behind the verdict from the FA in writing before deciding whether to appeal against the £220,000 fine and four-match ban that was handed down.
In the meantime, the 31-year-old is available for selection, and Di Matteo stated that after mulling over his options he had no qualms in picking him for the match at Emirates Stadium.
"It was the right choice to pick John," he declared. "I had a conversation with John about the game. I speak to all my players all the time. Of course, I considered not picking John. I had to think about what the right team was for the game and eventually I made the right selection.
"John showed his leadership qualities and what a good defender he is for the team."
Terry handed his boots to a young Chelsea fan after the final whistle on Saturday, something his manager says is a typical gesture.
"There are always a lot of negative things highlighted about John, but he does a lot of good work as well. He gives a lot of boots away to kids. He does a lot of positive stuff."
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