After producing some of his best form in a blue shirt last season as the Stamford Bridge outfit won the title, Terry has struggled this campaign as the champions find themselves six points above the relegation zone.
His time as a regular in the heart of defence appears to be coming to an end and the West London club are making plans to ensure they have a suitable replacement.
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There was a very public pursuit of Everton centre-back John Stones in the summer of 2015 and it would come as no surprise to see Chelsea offer a large sum of money for the England international once the season finishes.
However, it seems the Pensioners aren't putting all their eggs into one basket when it comes to defensive reinforcements, and it appears Dann is high on their wishlist.
Scouts from Chelsea have been to watch the 28-year-old in most of Palace's games this season and it seems they are impressed by his ability.
Dann rose to prominence at Birmingham City six years ago and there have been calls for Roy Hodgson to call him into the national team on many occasions since the start of 2015.
The defender recently signed a new five-year £60,000-a-week deal at Selhurst Park but could see his wage doubled with a move across London.
Although, the Mirror report Dann is reluctant to leave Palace due to his strong working relationship with Alan Pardew.
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