Soldier rated 'terrible' Commanding Officer's kept in (7)
I believe the answer is:
redcoat
'soldier' is the definition.
(redcoat is a kind of soldier)
'rated terrible commanding officer's kept in' is the wordplay.
'terrible' indicates anagramming the letters.
'commanding officer' becomes 'co'.
'kept in' is an insertion indicator.
'rated' is an anagram of 'redat'.
'redat' placed around 'co' is 'REDCOAT'.
(Other definitions for redcoat that I've seen before include "Old British soldier - Butlin's entertainment organiser" , "Do react (anag) - old soldier" , "British soldier and holiday camp worker" , "British soldier (historical)" , "Old-time British soldier" .)