A deal had already been agreed for Terry to be part of any package, and Smith has accepted to take the former England captain into his backroom team.
Sportsmail revealed how Terry had told friends he expected to return to the club he played for last season in a coaching capacity, and texted former teammates about seeing them at Bodymoor Heath on Monday.
Purslow, who worked with Terry at Chelsea, finalised terms with the 37-year-old and then pursued the appointment of an experienced manager to lead the Smith possesses superb credentials after bringing about an attractive style of play at Walsall and Brentford.
Smith does have long-term assistants in Richard O'Kelly and Thomas Frank, who are both expected to join Villa too, and Terry will find a role alongside.
Terry has been studying for his coaching badges at Chelsea and was last week overseeing a youth team game at Cobham.
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