Eduardo was banned for two games for diving in the Champions League clash with Celtic at the Emirates Stadium.
Terry said: “I can speak about the England lads and the England team and it (diving) is something we don’t do.
“I think sometimes we’re too honest because sometimes, even in the Premiership, you see the English lads get a bit of contact and try and stay on their feet and try and score from the chance they’ve been given.
“I think the Eduardo one was a dive. I think we all see that. It’s disappointing to see because Arsenal are a quality side and I don’t think they want to be portrayed like that.
“But, when the rules are not made clear enough and then something happens and someone gets a two-game ban, I think it is a bit harsh.
“If the rules are there beforehand then once he (Eduardo) makes that mistake, it’s down to Arsene Wenger to say ‘you know the rules, you shouldn’t be doing it’.
“It’s as simple as that. But until the rules are in place and it’s a clear picture for the players it’s difficult.”