Terahertz (THz) imaging has been regarded as cutting-edge technology in a wide range of applications due to its ability to penetrate through opaque materials, non-invasive nature, and its increased bandwidth capacity. Recently, THz imaging has been extensively researched in security, driver assistance technology, non-destructive testing, and medical applications. The objective of this review is to summarize the selection criteria for current state-of-the-art THz image reconstruction algorithms developed for short-range imaging applications over the last two decades. Moreover, we summarize the selected algorithms' performance and their implementation process. This study provides an in-depth understanding of the fundamentals of image reconstruction algorithms related to THz short-range imaging and future aspects of algorithm processing and selection.