Caterpillars are small, slow moving creatures that typically fall from high places rather than appear from holes. Caterpillars can be killed by typical means, and can also be squished when jumped on with magic boots. Caterpillars move much more slowly than snakes do, however they are larger and harder to avoid.
Tell me this - why does Bryant get hurt by caterpillars?
Caterpillars are white, and make squishy noises at random or when falling.