Terracotta clay is just ordinary natural surface clay. Get if from a dry wash or river after storm waters have gone away and left slick clay mud behind.

You can find dry terra cotta clay in any craft store, art supply, or maybe even the craft department of a big box store.

Good advice on places to locate the clay.

I'd suggest making the balls small. Dry them quickly in an area with good air flow. Setting them in front of a fan is good. If you make them larger and set them close together to dry, you may be disappointed. The seeds will stay moist long enough to begin germinating, and when the balls are used later the germinated seeds will be dried out and dead. Don't ask how I know this :)