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First of all, when you mouse over to the ssh terminal icon, what message appear under the "Help & Support" section in the navigation pane?
If it shows "..is not installed" then you have to install by going "Server->Updater-><your plesk version>", then check on "SSHTerm - SSH Terminal java applet" and then click on the "Install" button to install it.
If it shows "In order to use the terminal client, you should allow shell access for this domain" then you have to allow it by going "<your domain>->Setup", then find "Shell access to server with FTP user's credentials" and then change its value of "Forbidden" to other type of shells.
However, I have set both the client and the domain up to allow any kind of shell access.
Under 'Clients' --> client name --> 'Accounts' --> 'Permissions' --> under 'Management of access to server over SSH' I checked 'Client can allow access to any type of shell' --> clicked 'ok' to save.
and then:
Under 'Domains' --> mydomain.com --> 'Domain Administration' --> 'Domain Administrator Access' --> checked 'Allow domain administrator access' and then under 'Management of access to server over SSH' I ticked 'Domain administrator can allow access to any type of shell' --> clicked 'ok' to save.