"Choosing a captain is one of the most important decisions a coach has to make. I'm certain I've got the right man in John Terry," England manager Steve McClaren told The FA's official website.
"I'm convinced he will prove to be one of the best captains England has ever had.
"John has all the attributes an international captain needs: leadership, authority, courage, ability, tactical awareness and a total refusal to accept second-best," he added.
Terry succeeds Beckham, who stepped down as captain following England's elimination to Portugal in the World Cup.
The 25-year-old said he was delighted to have been chosen for the position and intends to live up to the challenge.
"It is the ultimate honor to be the captain of your country and I am very proud to be given this great opportunity," he said.
"It is an incredible challenge and one I am looking forward to very much."
Terry, who made his England debut in June 2003, captained Chelsea to two consecutive Premiership titles in 2005 and 2006 after a fifty-year trophy drought.
He will get his first chance to captain England when they face Greece in a friendly international on August 16th.
Liverpool skipper Steven Gerrard, who was one of the frontrunners for the position, has been appointed as a vice-captain.
"I would like to congratulate John on being appointed England captain. I'm sure he'll do a great job," Gerrard said.
"He's a tremendous leader for Chelsea and has all the qualities required to do the role.
"I'm also pleased to have been appointed vice-captain by Steve McClaren today. I am grateful that Steve took the time to call me and inform me of his decision.