The Palace boss was booed at half-time and again at full-time after a below-par show culminated in a 90th minute equaliser for the Tigers.
Taylor had led the Eagles to just two victories from their opening ten Championship games with his side currently 19th in the league table.
"Crystal Palace announce that Peter Taylor's contract has been terminated with immediate effect," confirmed a brief statement.
The former England Under-21 coach and manager of Hull, Brighton, Leicester City, Gillingham and Southend had replaced Iain Dowie in the Selhurst Park hot-seat last summer.
However, former Sheffield United boss Neil Warnock had been linked with the Palace job in recent weeks and Taylor had admitted the reports were a distraction.
Speaking last month about his relationship with Jordan, he said: "We had a discussion, but to be fair it wasn't so much football-related.
"We didn't talk about my future. Simon's not the type to go into that and neither am I.
"We need to win more matches to take any cloud away. Results take care of things and there will be fewer rumours about Neil Warnock if we stop giving away stupid goals, because we'll keep winning matches."