The 42-year-old former West Ham, Manchester United and England defender suggests things have got so bad that he "expected" the racist online abuse suffered by England stars Marcus Rashford, Jadon Sancho and Bukayo Saka after they missed penalties in the Euro 2020 final defeat to Italy.
Ferdinand was speaking to a joint parliamentary committee of MP's and peers with the aim of seeking improvements to the government's draft Online Safety Bill.
He said: "Self-esteem, your mental health is at risk.
"When those three players missed those penalties, the first thing I thought was 'let's see what happens on social media'.
"I expected [the abuse] to happen."
And he says that some of the online abuse aimed at him had a huge impact on some of his family members and led to him having to explain to his children what "the monkey emoji means in that context".
He added: "I have seen members of my family disintegrate at times when it happens.
"I have to sit there with my kids and explain what the monkey emoji means in that context."
And Ferdinand feels that a lack of consequences for using racist language has only served to "normalise" it.
He said: "If you put it in the context of a young person who supports a certain player at whatever level, he is looking through that feed and seeing racist language.
"That young person then goes into his network of friends and 'it's fine, it's normal so I'll say that at school so it's OK.
"When there are no repercussions, there is nothing done to expose that person for their ignorant language, then people are going to think it's normal."
The committee hearing is one of a number of steps being taken as part of the process of creating the draft bill.
The bill will aim "to establish a new regulatory framework to tackle harmful content online", which will then be passed into law.