He was a top contender, and a gentleman outside the ring. But it should be noted that he was never actually heavyweight champion. There was this other fellow named Muhammad Ali who was the real champ.
In early 1965, the WBA "stripped" the real champion for joining the Nation of Islam. This was well before Ali's troubles with the draft. It was simply because the WBA didn't like Ali's religion.
Hence, they had a fight-off between Terrell and Eddie Machen for their "title." Ernie won what was voted the most boring fight of the year. He would defend his "title" twice successfully, over Canadian George Chuvalo, and a faded Doug Jones.
During that time, Ali was willing to fight Terrell. However, the super patriots in boxing would not allow the fight to happen on US soil, and Terrell refused to go to Canada to fight Ali.
By the time the fight was made in Houston 1967, Ali and Terrell -- friends from their teenaged years in amateur boxing -- were no longer on good terms. Ali was having draft struggles, and as a member of the NOI, had made clear that he would not enter the military. Terrell, of Chicago, did have some connections with the NOI; however, he made the mistake of calling Ali "Cassius Clay." He thought it would build the gate.
Ali punished Terrell for 15 one-sided rounds.
Terrell would go on to be 6-4 until retiring. It's interesting to note that he was favored to win the 8-man tournament created to crown a new champion, after Ali's forced retirement; he was upset by Thad Spencer in the first round. More, the trainer of a young contender, Joe Frazier, refused to let Joe fight Ernie at this time in his career.