Foul, ultimately terrible, is within the rules (6)
I believe the answer is:
lawful
'within the rules' is the definition.
(I've seen this in another clue)
'foul ultimately terrible' is the wordplay.
'ultimately' suggests the final letters.
'terrible' becomes 'awful' (synonyms).
The final letter of 'foul' is 'l'.
'l'+'awful'='LAWFUL'
'is' is the link.
(Other definitions for lawful that I've seen before include "Legal" , "Allowed" , "Legally permissible" , "Not illegal" , "Legitimate" .)