That means central defender Terry, who played in the 6-0 English League Cup rout of Wolves on Wednesday, is available for Chelsea's Premier League match away to London rivals Arsenal.
Taylor cautioned against an appeal, telling Sky Sports: "Having sat on these panels and made judgments myself I know those people will have come to their conclusion in an honest and proper manner - they will have had legal advice.
"Whether John and Chelsea accept it is up to them, but I think it might be in everyone's interest to put it to bed."
Meanwhile, Herman Ouseley, chairman of the Kick It Out organisation that aims to eradicate racism from football, said: "This is not about recriminations. It's about how football moves forward from here after it has spent 11 months going through the wringer."
Earlier, Terry's representatives said he was "disappointed" by the decision and would consider his position before deciding whether to appeal. They said: "Mr Terry is disappointed that the FA Regulatory Commission has reached a different conclusion to the clear not guilty verdict of a court of law.
"He has asked for the detailed written reasons of the decision and will consider them carefully before deciding whether to lodge an appeal."
European champions Chelsea responded to yesterday's verdict by saying: "Chelsea Football Club notes and respects today's decision by the Football Association regarding John Terry.
"We also recognise that John has the right to appeal that decision. It is therefore inappropriate for us to comment further on the matter at this time."
The FA said it had charged Terry on July 27 with using "abusive and/or insulting words and/or behaviour towards Queens Park Rangers' Anton Ferdinand and which included a reference to colour and/or race contrary to FA Rule E3 (2)".
Terry dramatically announced his retirement from international football on Sunday, the day before the four-day hearing started, saying the FA had made his position with England "untenable" by pursuing the disciplinary case against him despite his courtroom acquittal.
England manager Roy Hodgson, who included Terry in his squad for Euro 2012, had been keen for the 78-times capped defender to continue his international career as the team try to qualify for the 2014 World Cup.
- AAP