Branislav Ivanovic's solitary strike means Mourinho's side are now well and truly in the hunt for league honours, level with second-placed City and only two points behind Arsenal.
Mourinho's methods may come in for criticism but he does know how to set up a team to get a result, something which Terry hailed following the victory for the Blues.
When asked if the result told the story of a Mourinho masterclass, Terry told Sky Sports 1: "Very much so. This is where he comes into his own.
"We spent a couple of days working on their strengths and weaknesses.
"After the disappointment of dropping two points against West Ham it was important to come here and bounce back.
"In the first 15 minutes they were very good and made it difficult. We showed a lot of character. Overall we were very sold and happy for the win."
Terry also believes that Monday night's victory over City - who failed to get on the scoresheet tonight in a season that has so far seen them almost score at will - could give other teams confidence against Manuel Pellegrini's side.
"They've been phenomenal scoring goals and turning teams over," Terry added.
"It was important not just for us but for other teams, showing that they can be beaten."
Chelsea manager Mourinho refused to give his side the tag of favourites in the title race and claimed it is not his objective to win the league this season.
Instead, the Portuguese said this term is all about building for the future, with the next campaign the one he is focused on turning into silverware.
"It's not our responsibility or objective to do that (win the league). Our objective is to build the team," Mourinho said. "Some managers, some clubs because of the nature their DNA they say two, three, five years.
"I want to start the next pre-season in the summer and say this season we are going to win the league. This season I can't."
However, despite his reluctance to lay claim to the league title this season, Mourinho thinks the result against City gives him plenty to be positive about.
"We played fantastic. Against a fantastic team, to play the way we did is amazing," he said.
"The process of building the team and preparing the team to be favourites as we want to be the favourites next season, this is a very important step.
"The best team in the Premier League - we have beaten them twice in the Premier League.
"It's very important because it's not good for the evolution of the team if we are playing 10 or 15 points behind or in the Europa League. We need big things and these kind of matches and the pressure we had today.
"The feeling of playing the way they played is a fantastic feeling for them."
For City boss Pellegrini, it was a frustrating match of missed chances.
He said: "We had clear chances but didn't do it and they had two or three shots against the post.
"It was a very close game to play against Chelsea without (Sergio) Aguero and Fernandinho."