The 41-year-old West Ham striker is out of contract at Upton Park, but hopes to extend his career by at least one more season.
He would likely be keen on coming to Palace since his 17-year-old son Charlie is already part of the Eagles' squad.
But Taylor says no approach has been made yet - and won't be until funds are freed up by other players leaving.
"Everybody knows I admire him, but I am in the same situation. If someone does not move from here, then it makes it difficult for me to bring people in," Taylor told the Croydon Guardian.
"Teddy looks after himself. He's fit, a good professional and can still do a job."