Is there a formal term for "snail mail"?

Postal mail is the usual term when one needs to be formal. "Terrestrial mail" is not in use and would likely cause at least some confusion.

Simply "mail" by itself may be sufficient. If you need to specifically reference physical mail delivered by the Post Office then "Postal Mail" may be preferable.

It may be the case that postal mail is a formal term; I don't know if it is or isn't, but clearly it suffers from redundancy and ambiguity, and is used less commonly than regular mail.

Alternatives such as regular mail, physical mail, paper mail, and surface mail all have been used, as shown by a 1995-2008 ngrams for "snail mail,postal mail,regular mail,surface mail,air mail,paper mail,physical mail":

Every one of the terms has problems: postal mail, redundancy and ambiguity (does it mean threatening notes?); regular mail, ambiguity (does it mean email or paper mail?); physical mail, clumsy; paper mail, informal; surface mail, inexact (more paper mail goes by air nowadays). Physical mail is the only one of these terms increasing in use at the moment, but still is least used.