Is recommended to disable telnet for security reasons because telenet is not a secure protocoal.
"When TELNET was initially developed in 1969, most users of networked computers were in the computer departments of academic institutions, or at large private and government research facilities. In this environment, security was not nearly as much of a concern as it became after the bandwidth explosion of the 1990s. The rise in the number of people with access to the Internet, and by extension, the number of people attempting to crack other people's servers made encrypted alternatives much more necessary."
(Font: http://en.wikipedia.org/wiki/TELNET#Security )
Login as root to your server, now:
# nano /etc/xinetd.d/telnet
Search for: "disable = no" (you can use Ctrl+W) ,
Change it to: disable = yes
Save and Exit
# /etc/rc.d/init.d/xinetd restart