Cardiff will allow long-serving Kevin McNaughton to leave this summer along with Danny Gabbidon and Nicky Maynard.
Highly-rated Atletico Madrid midfielder Saul Niguez has signed a new five-year contract.
Trotters manager Dougie Freedman has awarded the 20-year-old a 12-month deal and he becomes the third ex-Palace player to join the former Eagles boss in the north-west of England. The others are Ross Fitzsimons and Dean Moxey.
Taylor has never appeared for the Palace first team and spent time on loan with Welling last season.
Bolton open their Championship campaign with a trip to Watford on August 9.