Taylor went to his old club Leicester to buy Delaney for £50,000, just days after taking the manager's job at Boothferry Park in October.
Since joining the Irishman has started 31 games, mainly at left-back. However, the arrival of Andy Dawson this summer looked like threatening Delaney's place in the side.
But Taylor says that Delaney will be fitted into the side: "Damien knows he faces a strong challenge but I know he's a survivor. I've no doubts about that and he will be in my team.
Delaney Given Boost
"I do think Andy was the best left-back in the division last season and that's why I was determined to sign him when I knew he was available.
"Damien is going to be involved. He's someone I think very highly of. I was delighted with him last season and for me, he's someone who will only get better and better."
Delaney has been played at centre back and central midfield, but would would face strong competition for those places so it will remain to be seen where he lines up.
Taylor has also said that the recently released squad numbers - which put Dawson at number 3 and Delaney outside the 'first eleven' at 16 - should be no indication of his line-up.
He said: "People shouldn't start reading too much into the numbers. Just because someone has been awarded a number between 1 and 11 doesn't mean they will be in the team.
Delaney has been played at centre back and central midfield, but would would face strong competition for those places so it will remain to be seen where he lines up.
Taylor has also said that the recently released squad numbers - which put Dawson at number 3 and Delaney outside the 'first eleven' at 16 - should be no indication of his line-up.
He said: "People shouldn't start reading too much into the numbers. Just because someone has been awarded a number between 1 and 11 doesn't mean they will be in the team.
"I've already told the players that no-one is guaranteed a place and I'll be looking very closely at how we perform in the pre-season."