Terry, 31, is accused of calling Anton Ferdinand a "f****** black c***" during a Premier League game on October 23 last year.
He denies a racially aggravated public order offence, and claims that he was sarcastically repeating the slur that Ferdinand mistakenly thought he had used. Cole, also 31, told Westminster Magistrates' Court: "I think we shouldn't be sitting here."
He said while racism should never be tolerated, repeating what you thought someone said was "completely different". Cole said: "If I repeated something that I thought you said, that's totally different than if someone just says something."
The court was read a statement from former Chelsea manager Jose Mourinho, who denied Terry was racist.
Mourinho, who manages Spanish champions Real Madrid, said Terry had an excellent relationship with all the players regardless of ethnicity when he was Chelsea boss between June 2004 and September 2009. Terry also championed the FA's anti-racism campaigns.
Mourinho said: "I never once witnessed any demonstration of racism or racial abuse or behaviour. I am certain that John Terry is not a racist."
Several players - including Frank Lampard, Fernando Torres and Petr Cech - had signed copies of a prepared statement that said: "I have never heard John Terry use any form of racist language and have never heard any suggestion that he may have done so."
Chelsea chairman Bruce Buck also praised the defendant's character.
He said: "I would say, and other people at Chelsea would say, he has an almost uncanny mental strength that when there are some bumps in his personal life he is able to go on the football field and do his job as though nothing is going on. Other people have it, but I have never seen it like John Terry has it."
Source: PA
Source: PA