Sir Terry, who spent almost five years in captivity after being kidnapped in Lebanon, has been appointed a Knight Commander of the Order of St Michael and St George for his services to charity.
Suzanne Richards, a campaigner who lost her son, brother and father in the 2015 Tunisia terrorist attacks said she was "sad" they were not there to see her become an MBE.
Liz Tait, a British Red Cross volunteer who helped UK citizens escaping Sudan when armed conflict broke out earlier this year has been chosen to receive a British Empire Medal.
She was recognised for services to volunteering after spending more than 50 years offering dedicated support to people caught up crises around the world.
Sir Terry, 84, of Hartest, Suffolk, is the co-founder and president of Hostage International, which supports families of those taken captive, said he plans to keep on working.
"It really is a big surprise. I had no idea that this was coming up,” he said.
"And, of course, whenever this sort of award is given I recognise that there are a lot of people to whom one shares that award with, particularly with Hostage International and Emmaus for the homeless.
"They have worked incredibly hard and still do over the years to make those organisations what they are today. I'm just a figurehead, really."
As an envoy for the Church of England, Sir Terry travelled to Beirut to try to secure the release of four hostages but was kidnapped and held captive from 1987 to 1991.
He added: "It is a very significant honour and I'm really amazed that I've got it. I'm getting on but I'm still working at 84 now. I'm still very active.
"I suppose it's a peak, really. I was given an MBE many years ago and then I got a CBE several years afterwards. Now this is the next one up, so to speak.
"I think I've been very fortunate to get this because there are many other people who are deserving of honours who don't get mentioned.
Hope from tragedy
Ms Richards, 54, of Wednesbury, West Midlands, set up the Smile for Joel charity after Charles 'Patrick' Evans, 78, Adrian Evans, 49, and Joel Richards, 19, were killed in Tunisia.
The charity supports families hit by murder and terrorism,
"[I feel] absolutely amazing, shocked, overwhelmed, every emotion,” she said.
"When that letter came through in the post I was just so surprised, the charity is an amazing charity so many people helped me make it happen.
"Just to get that recognition was just wonderful and, straightaway, I rang [son and survivor] Owen and told him what we'd won because I do believe I share it with him as well."
Money donated to the charity is used to provide support to bereaved families, through holidays, bills or special gifts.
Help in world of crisis
Ms Tait, 65, from Lossiemouth, part of the British Red Cross' Psychosocial and Mental Health Team, was sent to Cyprus as the Sudan crisis escalated.
"I am absolutely delighted to have been recognised in the Birthday Honours list for my work volunteering with the British Red Cross.
"As a team, we work extremely hard to help people who face the most difficult challenges in life, and it is a huge honour to be recognised for that."
Among the stars and high-profile names in the birthday honours’ list are footballer Ian Wright, fashion editor Dame Anna Wintour and author Ian McEwan are among the famous faces recognised in the King's first Birthday Honours list.
Vogue editor-in-chief Dame Anna and Booker Prize-winning novelist McEwan were made Companions of Honour, alongside Sir John Bell, regius professor of medicine at the University of Oxford.
In the showbiz world, Line Of Duty actress Vicky McClure, television presenter Davina McCall and veteran broadcaster Ken Bruce were made MBEs.
Former England and Arsenal footballer Wright was made an OBE, and Sir Martin Amis, who died last month aged 73, was knighted.
McEwan said: "News of the honour, in a letter from the Cabinet Office, was a complete surprise and, naturally, I was delighted.
"I guess it amounts to a really good review. I'm now entering my 54th year of writing fiction. As all dedicated writers know, a literary life is not a career so much as a way of being.
"The task in hand, the novel one is trying to create, is always there, a constant and intimate companion.”
Bruce said the honour a "great surprise and privilege", while McCall said: "I can't believe it. It's a great honour and it really means a great deal."
Former Rangers footballer and manager John Greig was made a CBE while former Manchester United defender Jonny Evans and ex-Lionesses striker Eniola Aluko became MBEs.
MI6 chief Sir Richard Moore and Labour politician and former minister Sir Ben Bradshaw were knighted.
Conservative MPs John Baron, Bob Blackman, Damian Collins and Heather Wheeler were also recognised.
The king has made consultant gynaecologist Alan Farthing, who helped deliver the Prince and Princess of Wales's three children, a commander of the Royal Victorian Order (RVO).
Mr Farthing was surgeon-gynaecologist to the royal household for a number of years and is recognised in the Birthday Honours list.
The oldest recipient, 106-year-old Joan Willett, was given a British Empire Medal for her charitable fundraising for the British Heart Foundation, while the youngest, Junior Jay Frood, 18, received the same honour for services to vulnerable children.