Walcott scored three times in England’s 4-1 win against Croatia in a World Cup 2010 qualification match on Wednesday.
“He has been brilliant all week,” Terry told Sky Sports News.
“He has come out of his shell in this (the England) strip. In the Andorra game he was great in the first half.
“And he has come here and set the game alight, not only with his goals but with his work-rate for the team.
“He has given the manager a big problem now.”