Smith is joining the Villans from Brentford, replacing Steve Bruce, who was sacked earlier this month, reports Efe news.
Villa’s chief executive officer Christian Purslow said: “These three appointments represent the start of a new era and direction at Aston Villa and we are delighted to secure their services after an extensive search.”
“Dean has a clear and successful coaching philosophy as well as a real understanding of Aston Villa Football Club. He is also knowledgeable about the Championship,” Purslow added.
Terry, who made his name as stalwart center-back during his almost 10-year career at Chelsea, most recently played for Villa but announced his retirement from professional soccer on October 7.
Aston Villa is currently placed the 15th in the Championship table with 15 points, 10 points behind leader Sheffield United.