Without a win since Nov. 10, the champion has slipped from first to fourth in the Premier League and is three points behind leader Manchester United, which has a played a game less.
Tevez stays but City show same old failings
At the same time, Arsenal, which hosts Chelsea on Monday, has risen to second.
Chelsea's dip in form - winning just one of its last seven league matches - has coincided with the absence of talent like Terry, Frank Lampard and Michael Essien as well as the departure of assistant manager Ray Wilkins.
"We've missed some key players at key times and it is a case of keeping everyone fit now over the Christmas period, where we have two games in three days," Terry said. "In the past, we had a big squad and could rotate and put other players in.
"We don't have that now, we have quite a young squad and it's a time for everyone to stay together like we always will. Once we've turned that corner, we can move on from there and wait for other teams to slip up, which they will do."
Arsenal hasn't played since losing at Manchester United on Dec. 13, halting a brief revival that produced successive wins after losing at home to Tottenham.
"We have seen recently that any team, when you think they are on the brink of breaking through, they have a hiccup. Maybe it's just the quality of the league," Arsenal manager Arsene Wenger said. "It is always disruptive (to lose an assistant like Wilkins) but it is very difficult for me to speak about Chelsea. Frankly, they have their problems and we have our problems. I am trying to sort out our problems.
" Football is magic because it is a team sport and the addition of one player to the next player, when the confidence is there, multiplies the qualities of the players."
Arsenal's trip to Chelsea is the standout match of a packed Premier League program after the players enjoy Christmas Day off.
The other 18 topflight teams are in action on Dec. 26 _ weather permitting. The teams then get barely a day off before playing again on Tuesday or Wednesday.
Man United can strengthen its position at the summit with a victory Sunday over Sunderland, which moved into sixth by beating Bolton last weekend in one of the rare matches to survive the deep freeze.
"Someone said, 'Are you surprised you are top of the league?'," United manager Alex Ferguson said. "I am only surprised that people are surprised that all the top teams are dropping points. They don't recognize how tough the league is now.
"My aim is to try and be top of the league by January 4. If we are still top of the league by January 4 then we've done well."
Despite losing to Everton on Monday, Manchester City goes to Newcastle in third just two points behind neighbor United but having played two more matches.
Fifth-place Tottenham is at Aston Villa looking to return to winning ways after back-to-back draws, while Bolton is a point behind Spurs as it prepares to face West Bromwich.
As the season reaches its halfway point next week, Liverpool manager Roy Hodgson knows his ninth-place side must start putting together a string of wins if it is to qualify for Europe.
World Cup 2011
"We've had our chances and created danger, but I don't think we have converted enough," Hodgson said ahead of Sunday's match against Blackpool, which won at Anfield in October. "We do have goalscorers in the team and we have one of Europe's best in Fernando Torres. He doesn't need reminding if he misses a goal chance because I bet you he could recall every one he has missed in the past four months _ they stay with people."
Blackburn hosts Stoke with manager Steve Kean desperate for a win to strengthen his chances of keeping the Ewood Park job beyond the end of the season.
In the battle against the drop, Wolverhampton hosts Wigan, which is one place and a point above Wolves in the relegation zone. Bottom-place West Ham crosses London to play Fulham, which is only out of the bottom three on goal difference.
Birmingham, which is only two points clear of the drop zone, heads to Everton.