Taylor has shown his worth as one of the prominent key position players of the competition this season, shifting between defence and attack.
In Saturday night's win over the Western Bulldogs, the 26-year-old booted a five-goal haul in a best-on-ground showing.
Selwood is confident Taylor, who is out of contract at the end of the season, will recommit to the Cats.
"I'm very confident that Harry will be around," Selwood told 3AW on Monday.
"He's just working through things. He's got a family here now, he's got family back home, but I think Harry is pretty happy where he is.
"Harry loves the town, he loves playing for the Cats, we gave him his opportunity.
"We just hope that [Cats football manager] Neil Balme and his manager can work something out."
While Taylor has been a key player in the Cats' unbeaten start to the season, Selwood admitted the club's form had been "really patchy."
Of the Cats' five wins, three have been margins less than 10 points, and the other two games have been 21-point victories.
"Out of those games I think we've won about 11 quarters, which is a little bit worrying that we've let sides in the game for so long," Selwood said.
"But there's been some really good sides in there that we thought at the start of the year would be up there by the end of the season.
"We'll take 5-0 but we know we've got to get a lot better."
The Cats face Richmond on Saturday night at the MCG as stars Corey Enright (250 games) and Steve Johnson (200 games) celebrate their milestones.
Follow AFL website reporter Callum Twomey on Twitter at @AFL_CalTwomey.
