Carlo Ancelotti was dismissed at the end of the campaign after Chelsea ended the season empty-handed, and there have been a number of names linked to the post including Andre Villas-Boas, Marco van Basten and Harry Redknapp.
However, Hiddink - who impressed when taking over from Luiz Felipe Scolari at the end of the 2008-09 campaign - is thought to be the leading candidate, having suggested he is ready to walk away from Turkey.
Blues captain Terry has now said that, while the players will have no sway over the decision, they would be happy to see Hiddink take charge.
"There's a lot of speculation out there at the moment," Terry told an England press conference ahead of the team's Euro 2012 qualifier against Switzerland on Saturday. "I was very sad to see Carlo go.
"He was a great man, a great manager and supported me a lot over the [England] captaincy. Having done the double for the first time in Chelsea's history, that is something that will live with the club, live with him and the players forever.
"We then pushed Manchester United so close for the title this season after being out of the race realistically for three months and before turning around that form.
"I was disappointed to see him go. It's out of the players' hands - it's a club decision. The manager and the players respect that. But we are looking forward to the new manager coming in and hopefully getting that trophy [the Premier League title] back."
He added: "We had a great time under Guus. We had four or five months under him and came to Wembley and won the FA Cup, so he would be welcomed back.
"I have great memories of him. He is someone I have been in contact with since he left the club. The players completely respected him. He knows the players inside out as well. He would be welcomed back.
"If it is to be him, then great, or whoever it is, the players will naturally get on with it and work very hard under the new manager."
While Hiddink remains the favourite, there has been speculation that Hughes could be in contention. The Welshman, who spent three years as a Chelsea player in the 1990s, is a free agent after he decided against renewing his contract at Fulham.
It was thought he would replace Gerard Houllier at Aston Villa, but there are now indications that owner Randy Lerner is looking elsewhere and could make an ambitious bid to tempt Ancelotti to Villa Park.
Terry feels that Hughes, who was linked with Chelsea before taking the Manchester City job in 2008, would also have the support of the squad if he returned to Stamford Bridge.
"He's someone that hopefully the club will be talking to," he said. "I know Mark and his backroom staff and they have an understanding of the club and knowing how much the club means to the supporters will come naturally to them. If it's him, he will be welcomed by the players."
Hughes made an attempt to take Terry from Chelsea to City in 2009.