You have to ask the question "Why now?". I think he knows something we don't, namely how his FA trial is going to end up.
Yes, Terry is a thug, but so is half of the England team. On his day he was an effective defender and a leader on the pitch.
The time for rejuvenating the England squad was two years ago. I would drop nearly every single one of the starting eleven because many of them are either too old or too familiar, but mainly because they've had their time in the squad. We have countless players that don't and won't get a chance, both for club and country, until they hit a big squad. It's mainly the players fault, because if they weren't so desperate to stay in the Premier League they'd have ample opportunity at Champions League football elsewhere.
I should be glad that Terry has retired, but frankly his spot in the team isn't going to go to a new player. It'll be Cahill and Lescott instead until they're either out of the big teams or are injured.