Terry was snubbed by Bridge in the pre-match handshakes before Manchester City's 4-2 win over Carlo Ancelotti's side at Stamford Bridge, with Capello watching the game from the stands.
Fabio Capello (talking to the News of the World): "As long as I am England manager, I don't think John Terry will be captain again.
"The problem between John Terry and Wayne Bridge was not good and that is the only reason he is no longer captain.
"I expect my captain to be responsible to children and for the fans. I told him all of this.
"I have asked Terry to be the same as before because he is a leader, but the situation with Bridge was not good. When I spoke with Terry, he understood everything. I know exactly what happened.
"Terry is a leader of men, even without the armband. I hope this is the end of the problem because it is not good for the fans or the players.
"The spirit of the group remains the same. I'm not interested in this problem any more and my only concern now is that the best players are fit."
Bridge has withdrawn from the summer's World Cup finals in South Africa, and reports from London suggest Terry could do the same.
And where would that put Capello ... because Terry is the only fully fit member of his preferred back four going into the finals, with Ashley Cole, Glenn Johnson and Rio Ferdinand all struggling with injury problems?
Bridge is an average left-back (at best) and hardly set to give Capello a headache ... but Terry is arguably the best central defender in world football.
Capello is calling the shots ... but there is only so much Terry will take.
No man is more proud to wear the England armband than Terry ... and you will get half a player snubbing him.
What he did was away from football; shit happens; but you move on.
Capello has said he wants the matter forgotten ... but then again ... he says Terry will never be captain again.
This is ENGLAND we are talking about here. And I think this matter has been blown up (as always) by the News Of The World that sells newspapers on the strength of ruining people's lives.