Taylor, who had previously been in charge between 1996-99, took on the job for a second time in July 2004 on a part-time basis, combining it with his Hull City duties.
His two-year contract with the FA expired last month, but after meeting with McClaren yesterday, he will continue on a game by game basis until a full time appointment is made. The next match is against Moldova on 15th August at Ipswich.
If and when a new coach is appointed, it may help City's chances of hosting England Under-21 international matches at the KC Stadium. Taylor had been unwilling to return to Hull, but after the sell-out successes of previous matches held in the 25,000 all-seater stadium, the FA may open the window on that happening again.