The 60-year-old took charge of the club last month on an interim basis in the wake of the departure of Martin Allen.
"The players and I are delighted that Peter has agreed to stay on at the club and we wish him every success in his ongoing efforts to push the team up the table," chairman Paul Scully told the club's official website.
Taylor previously spent time in charge of the Gills between 1999 and 2000.
Restore Data
| Team | P | W | D | L | F | A | GD | PTS | |
| C | Stockport CountyStockport | 46 | 27 | 11 | 8 | 96 | 48 | 48 | 92 |
| P | Wrexham | 46 | 26 | 10 | 10 | 89 | 52 | 37 | 88 |
| P | Mansfield TownMansfield | 46 | 24 | 14 | 8 | 90 | 47 | 43 | 86 |
| 4 | MK Dons | 46 | 23 | 9 | 14 | 83 | 68 | 15 | 78 |
| 5 | Doncaster RoversDoncaster | 46 | 21 | 8 | 17 | 73 | 68 | 5 | 71 |
| 6 | Crewe AlexandraCrewe | 46 | 19 | 14 | 13 | 69 | 65 | 4 | 71 |
| 7 | Crawley TownCrawley | 46 | 21 | 7 | 18 | 73 | 67 | 6 | 70 |
| 8 | BarrowBarrow | 46 | 18 | 15 | 13 | 62 | 56 | 6 | 69 |
| 9 | Bradford CityBradford | 46 | 19 | 12 | 15 | 61 | 59 | 2 | 69 |
| 10 | AFC Wimbledon | 46 | 17 | 14 | 15 | 64 | 51 | 13 | 65 |
| 11 | Walsall | 46 | 18 | 11 | 17 | 69 | 73 | -4 | 65 |
| 12 | Gillingham | 46 | 18 | 10 | 18 | 46 | 57 | -11 | 64 |
| 13 | Harrogate TownHarrogate | 46 | 17 | 12 | 17 | 60 | 69 | -9 | 63 |
| 14 | Notts County | 46 | 18 | 7 | 21 | 89 | 86 | 3 | 61 |
| 15 | Morecambe | 46 | 17 | 10 | 19 | 67 | 81 | -14 | 58 |
| 16 | Tranmere RoversTranmere | 46 | 17 | 6 | 23 | 67 | 70 | -3 | 57 |
| 17 | Accrington StanleyAccrington | 46 | 16 | 9 | 21 | 63 | 71 | -8 | 57 |
| 18 | Newport CountyNewport | 46 | 16 | 7 | 23 | 62 | 76 | -14 | 55 |
| 19 | Swindon TownSwindon | 46 | 14 | 12 | 20 | 77 | 83 | -6 | 54 |
| 20 | Salford City | 46 | 13 | 12 | 21 | 66 | 82 | -16 | 51 |
| 21 | Grimsby Town | 46 | 11 | 16 | 19 | 57 | 74 | -17 | 49 |
| 22 | Colchester UnitedColchester | 46 | 11 | 12 | 23 | 59 | 80 | -21 | 45 |
| R | Sutton UnitedSutton | 46 | 9 | 15 | 22 | 59 | 84 | -25 | 42 |
| R | Forest Green RoversForest Green | 46 | 11 | 9 | 26 | 44 | 78 | -34 | 42 |
| > League Two Full Table | |||||||||
