Defoe has agreed a move to MLS outfit Toronto at the end of the month, but will sit out Tottenham's UEFA Europa League last 32 second leg with Dnipro on Thursday due to a hamstring injury.
The 31-year-old, who broke Martin Chivers' club record of 22 European goals with a penalty in the 2-1 win over Sheriff in November, has been a huge hit at White Hart Lane over two spells.
And head coach Sherwood believes the England international is among the club's all-time greats.
"Obviously you would argue that there's Jimmy Greaves, but Jermain Defoe is possibly one of the best goalscorers the club's ever seen," he said.
"Unfortunately he's not fit. He'll be at the game to say his goodbyes, hopefully.
"Let's hope we can find another like Jermain Defoe because he's all about goals.
"Whenever he pulled on the Tottenham shirt he always played with his heart and spirit for the club and gave everything, and everyone appreciates his efforts here.
"He certainly will be a legend at the club."
Sherwood also revealed that midfielder Sandro was back in contention for the Dnipro clash - which will see Tottenham attempting to overturn a 1-0 deficit at White Hart Lane - after missing the past two months with injury.
"We've been very careful with Sandro because he's been out for long periods and, previously, when he's been put back in too early he's had a little niggle and he's had to miss a few weeks," he added.
"But he's done more training than he's ever done before so we've strengthened the injury and we're hoping that he's ready to go.
"It’s good to have Sandro back in the squad. He's a great character around the dressing-room and he gives everything on the pitch and leaves nothing on the field.
"You know for sure he's going to give you 100 per cent."
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