Reaching a terminal velocity in air does not make it an equilibrium process, just as dragging a heavy bag on a surface with friction is not a thermodynamical equilibrium process.
Assuming that the size of the mass, $m$, of the object falling in air is small enough so that the Earth's gravitational potential does not change by the objects motion, the gravitational work that the object loses as it drops from height $h_1$ to $h_2$ is exactly $w_{12}=m(gh_1-gh_2)$, and it does not matter whether it stops at $h_2$ or continues on at a constant terminal velocity. If between those heights this $w_{12}$ work lost from the object is used to move something else by said motion, say, an electric motor, or lift another object in a gravitational field, etc., and thereby gaining $w*$ work, then the difference $w_{12}-w^*$ is dissipated into heat.
If the works $w_{12}$ and $w*$ are small so that the heat dissipation is essentially occurring at a constant temperature, then $w_{12}-w^*=q=T\sigma$ where $\sigma=\sigma(h)$ is the locally generated entropy at temperature $T=T(h)$ and it is a positive quantity characteristic of the process. The total dissipated heat is the integral along the process $\int_{h_1}^{h_2} T\sigma.$ In the case of the falling object both the air and the object itself may get heated up by the air resistance.