The 79-year-old director admitted it was difficult seeing his 'Monty Python' co-star - who passed away earlier this week - become a "shell" of his former self as he struggled to even remember who his old pal was.
He told The Sun newspaper: "Terry's dementia was very sad. I got so depressed when I saw Terry because I was not sure he even recognised who I was.
"We were old buddies and physically he looked great. He was a well-groomed shell."
And the 'Man Who Killed Don Quixote' filmmaker felt the man he knew had long gone before Terry passed away.
He said: "Who Terry used to be was no longer inhabiting his body, as far as we could see.
"He was always argumentative (when healthy), just a pain in the ass. He was great. A wonderful, passionate human being.
"Terry was totally consumed with life. One could never hope for a better friend."
The filmmaker himself is still in good health and has no plans to retire as he thinks that is what will ultimately kill him.
He joked: "I have my hearing aids in, I have plastic lenses after getting my cataracts removed.
"My prostate has been scraped out. I am just doing fine. At least, the bits of me that are plastic are doing very well!
"If I stop working, I will die. I really feel that."
Following his friend's passing earlier this week, the '12 Monkeys' filmmaker paid tribute to him on Twitter.
He wrote: "HE WAS A VERY NAUGHTY BOY!!...and we miss you ... Terry was someone totally consumed with life.. a brilliant, constantly questioning, iconoclastic, righteously argumentative and angry but outrageously funny and generous and kind human being and very often a complete pain in the ass. One could never hope for a better friend. Goodbye, Tel. (sic)"