When the World Boxing Association stripped Muhammad Ali of his title after his agreement to fight a rematch with Sonny Liston, the WBA matched Terrell and Eddie Machen for the vacant crown.

"[4] Ali further stoked the prefight ill-will by labeling Terrell "an Uncle Tom nigger who is going to get his ass whupped".

The Daily Telegraph wrote that the resulting fight was "the nastiest display of Ali's celebrated ring career", describing how he seized Terrell in a headlock and dragged Terrell's eye along the top rope, and declared, "The fight will be remembered for Ali's constant taunts of 'what's my name?'

Terrell lost an upset 12-round decision to Thad Spencer later in 1967 in the WBA heavyweight tournament that was organized after Ali was stripped of his title in April 1967.

He left the sport for three years following the loss, but returned in 1970, winning seven consecutive fights before losing to Chuck Wepner by decision.

He ran unsuccessfully for alderman of Chicago's 34th ward in 1987, finishing second in the primary although lost to Lemuel Austin in a runoff.

Terrell died at the age of 75 on December 16, 2014, in a hospital at Evergreen Park, Illinois, having been afflicted in his final years with dementia.