Centre-back Terry has repeatedly and emphatically denied aiming a racial slur at QPR defender Anton Ferdinand during the Blues’ 1-0 defeat in a fiery west London derby at Loftus Road on 23 October.
The CPS will decide whether there is evidence to prosecute Terry over the coming weeks. The 30-year-old was questioned under caution by Metropolitan Police officers last week.
The Football Association has also launched an investigation into the allegations levelled at Terry but is waiting for police to conclude their probe before reaching a decision.
If Terry is found guilty it would severely jeopardise his status as England captain. He was only reinstated in March, having been stripped of the armband last year over claims he had an affair with the ex-girlfriend of national team-mate Wayne Bridge.
The police and FA probes were launched after members of the public contacted them to complain about the alleged abuse, footage of which was quickly circulated on the internet. England manager Fabio Capello resisted calls from some pundits to drop Terry for last month’s friendlies against Spain and Sweden.
Terry has said: “I’ve seen that there’s a lot of comments on the internet with regards to some video footage of me during the game.
“I’m disappointed that people have leapt to the wrong conclusions about the context of what I was seen to be saying to Anton Ferdinand. I would never say such a thing, and I’m saddened that people would think so.”
Terry has explained his comments by arguing that it was a misunderstanding. He has said he was not shouting at Ferdinand, but asking whether the QPR player thought he had used the slur.