Rovers remain without a permanent replacement for Henning Berg despite global advisor Shebby Singh stating his intent to have a new man in by New Year's Day.
The Championship club have enjoyed back-to-back wins under caretaker boss Gary Bowyer, but the bookmakers are sceptical over his chances of taking the job on a permanent basis at odds of 12/1.
Former England under-21 boss Taylor boasts a wealth of experience with a number of Football League clubs and is available after leaving his position as Bahrain's head coach in October.
Billy Davies, who has been out of work since leaving Nottingham Forest last season, is considered the other leading candidate for the post at 2/1.
Both Mark Hughes (now 12/1) and Kevin MacDonald (20/1) have also previously been favourites for the post with the bookmakers since the sacking of Berg.
Sky Bet's Chris Spicer said: "It remains somewhat of a guessing game as to who Blackburn will turn to next but the recent money points to the surprise appointment of Taylor.
"We imagine the recent turmoil at the club is likely to limit their options somewhat, but our shortlist contains plenty of well-respected managers, making Taylor a bit of a strange option."
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