Its theme song was composed by Muttonbirds frontman Don McGlashan.
The new series will be directed by Gerard Johnstone and produced by Luke Sharpe, who has made music videos for Op Shop, Che Fu and helmed the 48 Hour Film Festival-winning short A Fairly Good Tale.
Steve Ballantyne, the original author Terry Teo, showed his excitement at the series being resurrected in a post on Twitter.
RT @gemmagracewood: @DylanReeve @SteveTheSkeptic @dylanhorrocks TERRY TEO IS COMING BACK TO TV!!! #stillhappy #METOO
NZ On Air funding was also given for a new series of youth-targeted 'romantic whodunnit'Girl vs Boy.
"It is significant to have two quality locally-made drama series for young people - a real sign that programme-makers, broadcasters and NZ On Air value this audience," said NZ On Air chief executive Jane Wrightson.
Watch the first episode of Terry Teo:
- nzherald.co.nz