Do you intend to cut down into this or will the terrace be only built up?
You need to organise your terrace and its retaining wall so that heavy rain is not going to cause a problem. The higher the wall the stronger it must be and the more risk there is of water behind it being a problem. You need to ensure that any surface water runs to a place where it can be dealt with (not, for example, into the garage as an acquaintance did) and the wall needs weep holes so that it doesn't become a dam because then the hydrostatic water pressure may push it over.
David