I have been dealing with a similar kind of project, so maybe these comments help you. I had a pdf document with all the contour lines. Actually some really helpful people in this forum helped me to convert the pdf into skp file (pdf => dxf => skp). Anyway, if you don't have these softwares I have found that the best way is to trace the contour lines form image file of the terrain/contours. Workflow would be:
Import the image file and scale it to the right size
Trace the contour lines with Catmull Spline - tool (bezierspline plugin) and using top view
Put all the contours on certain layer that corresponds the height value (contour height 20m => layer: 20m)
Use Edge tools or simplify contours plugins to simplify the contours if needed
Use front/back view and use the move tool to put the contour lines to certain height
Use Sandbox tool to create the terrain
Anyway, I don't know detailed you need to be and how big is the terrain. This is the map of the project that I have been dealing with.
http://i.imgur.com/q5M5z.jpg