Terry auditioned for the thirteenth series of The X Factor in 2016, singing a cover of Ben E. King's "Stand by Me", which earned him four yeses from the judges. Terry was placed in the "boys" category and reached the live shows, where he was mentored by Nicole Scherzinger. Following the eliminations of Freddy Parker in week 2 and Ryan Lawrie in week 7, Terry became Scherzinger's last act left in the competition. He ended up in the bottom two in the semi-final and faced the sing-off against Emily Middlemas but was sent through to the final when Scherzinger, Louis Walsh and Sharon Osbourne voted to send him through to the final.
On 11 December 2016, he was crowned as the winner of The X Factor 2016, over Saara Aalto, making him the second winner, after James Arthur, to be in the bottom two at any given stage of the competition. He immediately released his winner's single, "When Christmas Comes Around", an original song written by Ed Sheeran. It is the second time that the winner has released an original winner's song, the first being the second series winner Shayne Ward, who released his debut single "That's My Goal". Following his win, Terry signed with Syco and RCA Records.