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The pair were team-mates at White Hart Lane, while Taylor was England under-21 coach during Hoddle's spell in charge of the senior team.
Taylor backed Hoddle as he reflected on a week of managerial departures that's seen Steve Clarke sacked by West Brom and Andre Villas-Boas axed by Spurs, while Gianfranco Zola quit Watford after a poor run of results.
Hoddle has been strongly linked with a return to Spurs and Taylor said: "I'd be so delighted for him and that's where he should be. He's a top, top manager.
"He knows the game inside out and whenever you listen to him on the television with Sky, he makes so much sense.
"For him, Tottenham would still be in his heart."
Taylor believes managers should be given more time and was surprised by this week's events.
He added: "Tottenham Hotspur were absolutely flying and then a couple of bad results and the manager goes.
"At the end of last season I was working with the FA and I watched Watford play in the Championship and they were the best team you could ever go and watch.
"All of a sudden Zola goes because they haven't won in so many matches.
"This is what people have got to realise. You've got no divine right to win a match or score a goal.
"You have to earn it every time you go out and play.
"Managers don't get enough time because there's always a reaction.
"There's a reaction from supporters and sometimes it goes to board level.
"I'm very surprised this week, especially with Zola, because it's obvious he's just resigned."
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