England and Chelsea defender Terry, 31, is accused of calling Ferdinand a "f****** black c***" during a Premier League match in October 2011.
The Queens Park Rangers (QPR) defender told Westminster Magistrates' Court that initially he did not think any racist terms had been used.
But after the match his girlfriend at the time played him a YouTube clip, and he became convinced that one had.
Ferdinand told the court that if he had realised at the time he would have told officials.
He said: "I would have been obviously very hurt and I probably wouldn't have reacted at the time because, being a professional, you can't do that. I probably would have let the officials know what happened and dealt with it after the game.
"When someone brings your colour into it, it takes it to another level and it's very hurtful."
Watford or Crystal Palace can still expect to receive £120 million ($204 million) if they are relegated from the English Premier League after just one year of top-flight football.