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Since Platt's departure the FA have wanted Taylor to return to the job, but due to his commitments as Hull City manager it has taken until now to agree a deal.
Taylor said: "Being involved with England is always a great honour and I am absolutely delighted at being asked to take over the Under-21s again.
"I am looking forward to the challenge and I have no doubts that I can combine the job successfully with managing Hull City."
The situation will be reviewed at the end of the season.
Meanwhile, Taylor will bring his Under-21 side to the KC Stadium in Hull for a match with their German counterparts early in 2005. The two Under-21 games previously hosted at the stadium have been 25,000 sell-outs.