Ferdinand gave his testimony to the independent panel at the hearing at Wembley Stadium, with Chelsea skipper Terry in attendance to hear the evidence against him.
After the hearing was under way, England manager Roy Hodgson released a statement expressing dismay at Terry's decision to quit international football, while the FA denied the 31-year-old's claim that it was "untenable" for him to play for England any more when the association were pursuing charges against him.
Ferdinand was at Wembley all morning, leaving just before midday, while Terry remained at the hearing until mid-afternoon. Terry is expected back on Tuesday and the case could last most of the week.
Terry announced his international retirement on Sunday night on the eve of the hearing and Hodgson said he was sorry to lose the services of the defender - one of his best players at Euro 2012.
Only last month Hodgson said he would pick Terry again if he only received a short ban and those close to the defender say the England manager tried to talk him out of the decision to quit.
Hodgson said in a statement: "I'd like to thank John Terry for his commitment to the England team since I became manager.
"I am of course disappointed to lose a player of John's international experience and exceptional ability.
"I have enjoyed a good relationship with John during my time as England manager and I reluctantly accept his decision.
"I can also confirm that he had the courtesy to call me prior to announcement his retirement from the England team.
"I'd like to wish John well for the future with Chelsea."
Terry effectively accused the FA of forcing his hand after they pursued charges despite him being cleared in court of a racially-aggravated public order offence over the same incident last October.
FA general secretary Alex Horne denied this, however, telling Sky Sports News: "I don't see how we've made it untenable - they're two very separate processes.
"It's something that happened in a match between QPR and Chelsea - it shouldn't be taking a year to resolve but we feel we're reaching a conclusion on that.
"That's a very different process, from my perspective, from our England procedures.
"They sit in different compartments and I could separate the two in my mind.
"But, unfortunately it doesn't look like he could."
A similar hearing involving Liverpool's Luis Suarez took four days and led to the Liverpool striker being banned for eight matches.
Terry could face a similarly lengthy ban if found guilty by the FA of using racist language during Chelsea's Barclays Premier League defeat at QPR on October 23 last year - a charge he categorically denies.
The 31-year-old was found not guilty in court in July, with the prosecution unable to prove he had called Ferdinand a "f****** black c***" as an insult.
Terry admitted using the words, but insisted he had only been repeating words he thought Ferdinand had accused him of saying.
Chelsea team-mate Ashley Cole testified for Terry in court but it is not known whether he will do so in the FA hearing. It is understood Cole has no plans to follow Terry into international retirement in a show of solidarity.
The FA also thanked Terry today for his England service. A statement said: "Following his announcement that he is retiring from the England team, The FA would like to thank John Terry for all of his efforts with the national team over the past decade.
"During his 78 appearances John has always given his full commitment to the team."
Meanwhile, former Chelsea manager Avram Grant has criticised the FA for taking the action against Terry, and was surprised by his decision to quit England.
He told BBC Radio Five: "Nobody thinks that John Terry is a racist so the FA need to leave it.
"John likes to fight and he's very passionate about the national team so I was surprised.
"But he's not a child. He knows what he's doing. One thing I must say about JT is that he's not a racist - that's for sure. He's a good man."
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