First, make sure you have Windows Terminal installed.

For Windows 10, to add Open Windows Terminal here option to your context menu in File Explorer, you can either use PowerToys that has this feature built in, or you can use the following .reg file to do so.

Don’t forget to replace <YOUR_USERNAME> with your Windows user name, and save it as a wt.reg file.

wt.reg:

Windows Registry Editor Version 5.00

[HKEY_CLASSES_ROOT\Directory\Background\shell\wt]
@="Open Windows Terminal here"
"Icon"="C:\\Users\\<YOUR_USERNAME>\\AppData\\Local\\Microsoft\\WindowsApps\\wt_32.ico"

[HKEY_CLASSES_ROOT\Directory\Background\shell\wt\command]
@="C:\\Users\\<YOUR_USERNAME>\\AppData\\Local\\Microsoft\\WindowsApps\\wt.exe -d ."

Then double click the wt.reg to run the script and write to your Windows registry. Now the Open Windows Terminal here option should show up in your File Explorer context menu and be working like a charm!