diff --git a/pkg/kubelet/pod_workers.go b/pkg/kubelet/pod_workers.go
index 8d72e1ad55e..a176b2fb984 100644
--- a/pkg/kubelet/pod_workers.go
+++ b/pkg/kubelet/pod_workers.go
@@ -775,16 +775,23 @@ func (p *podWorkers) UpdatePod(options UpdatePodOptions) {
 		}
 		// if this pod is being synced for the first time, we need to make sure it is an active pod
 		if options.Pod != nil && (options.Pod.Status.Phase == v1.PodFailed || options.Pod.Status.Phase == v1.PodSucceeded) {
-			// check to see if the pod is not running and the pod is terminal.
-			// If this succeeds then record in the podWorker that it is terminated.
+			// Check to see if the pod is not running and the pod is terminal; if this succeeds then record in the podWorker that it is terminated.
+			// This is needed because after a kubelet restart, we need to ensure terminal pods will NOT be considered active in Pod Admission. See http://issues.k8s.io/105523
+			// However, `filterOutInactivePods`, considers pods that are actively terminating as active. As a result, `IsPodKnownTerminated()` needs to return true and thus `terminatedAt` needs to be set.
 			if statusCache, err := p.podCache.Get(uid); err == nil {
 				if isPodStatusCacheTerminal(statusCache) {
+					// At this point we know:
+					// (1) The pod is terminal based on the config source.
+					// (2) The pod is terminal based on the runtime cache.
+					// This implies that this pod had already completed `SyncTerminatingPod` sometime in the past. The pod is likely being synced for the first time due to a kubelet restart.
+					// These pods need to complete SyncTerminatedPod to ensure that all resources are cleaned and that the status manager makes the final status updates for the pod.
+					// As a result, set finished: false, to ensure a Terminated event will be sent and `SyncTerminatedPod` will run.
 					status = &podSyncStatus{
 						terminatedAt:       now,
 						terminatingAt:      now,
 						syncedAt:           now,
 						startedTerminating: true,
-						finished:           true,
+						finished:           false,
 						fullname:           kubecontainer.BuildPodFullName(name, ns),
 					}
 				}
diff --git a/pkg/kubelet/pod_workers_test.go b/pkg/kubelet/pod_workers_test.go
index 3fcd2465c14..8fca3c255a8 100644
--- a/pkg/kubelet/pod_workers_test.go
+++ b/pkg/kubelet/pod_workers_test.go
@@ -754,23 +754,41 @@ func TestUpdatePod(t *testing.T) {
 			expectKnownTerminated: true,
 		},
 		{
-			name: "a pod that is terminal and has never started is finished immediately if the runtime has a cached terminal state",
+			name: "a pod that is terminal and has never started advances to finished if the runtime has a cached terminal state",
 			update: UpdatePodOptions{
 				UpdateType: kubetypes.SyncPodCreate,
 				Pod:        newPodWithPhase("1", "done-pod", v1.PodSucceeded),
 			},
 			runtimeStatus: &kubecontainer.PodStatus{ /* we know about this pod */ },
-			expect: &podSyncStatus{
+			expectBeforeWorker: &podSyncStatus{
+				fullname:      "done-pod_ns",
+				syncedAt:      time.Unix(1, 0),
+				terminatingAt: time.Unix(1, 0),
+				terminatedAt:  time.Unix(1, 0),
+				pendingUpdate: &UpdatePodOptions{
+					UpdateType: kubetypes.SyncPodCreate,
+					Pod:        newPodWithPhase("1", "done-pod", v1.PodSucceeded),
+				},
+				finished:           false, // Should be marked as not finished initially (to ensure `SyncTerminatedPod` will run) and status will progress to terminated.
+				startedTerminating: true,
+				working:            true,
+			},
+			expect: hasContext(&podSyncStatus{
 				fullname:           "done-pod_ns",
 				syncedAt:           time.Unix(1, 0),
 				terminatingAt:      time.Unix(1, 0),
 				terminatedAt:       time.Unix(1, 0),
+				startedAt:          time.Unix(3, 0),
 				startedTerminating: true,
 				finished:           true,
+				activeUpdate: &UpdatePodOptions{
+					UpdateType: kubetypes.SyncPodSync,
+					Pod:        newPodWithPhase("1", "done-pod", v1.PodSucceeded),
+				},
 
 				// if we have never seen the pod before, a restart makes no sense
 				restartRequested: false,
-			},
+			}),
 			expectKnownTerminated: true,
 		},
 		{