Human telomeric repeat binding factors TRF1, TRF2 along with TIN2 form a core of shelterin complex that protects chromosome ends against unwanted end-joining and DNA repair. We applied a single-molecule approach to assess TRF1-TIN2-TRF2 complex formation in solution at physiological conditions. Fluorescence Cross-Correlation Spectroscopy (FCCS) was used to describe the complex formation by analyzing how coincident fluctuations of differently labeled TRF1 and TRF2 correlate when they move together through the confocal volume of the microscope. We observed, at the single-molecule level, that TRF1 effectively substituted TRF2 on TIN2. We assessed the effect of another telomeric factor TPP1 that recruits telomerase to telomeres. We found that TPP1 upon binding to TIN2 induces allosteric changes that expand TIN2 binding capacity, such that TIN2 can accommodate both TRF1 and TRF2 simultaneously. We suggest a molecular model that explains why TPP1 is essential for the stable formation of TRF1-TIN2-TRF2 core complex.