"I don't know what my future is. I have time to think," said Taylor who played in Boro's 4-0 win over Bristol City.
"I loved my time there, I loved the manager there. But obviously Middlesbrough's in my heart."
He added: "I've been here all my career. It's something to think about. I didn't know what I was doing. I didn't know if I was signing for Watford permanently."
The former England Under-21 international moved to Watford on loan in August 2010 after struggling under former Middlesbrough manager Gordon Strachan.
He explained: "I'm not going to lie, I didn't really get on with Gordon and I didn't enjoy my time when he was here and that's why I left."
The defender impressed during his spell with the Hornets, making 19 appearances, and also scored his first ever professional goal - a left-footed volley in Watford's 3-0 win over Portsmouth a day before his loan deal came to an end.
On returning to Middlesbrough, Taylor said that he had been impressed with the influence of new manager Tony Mowbray.
"It's a lot different now the gaffer's in. The atmosphere's a lot better, the training's a lot better." Meanwhile Mowbray praised Taylor by saying: "He's my kind of player."
A product of the Middlesbrough academy, Taylor also had a loan spell at Bradford City in 2005/06, making 24 league appearances.
Source: BBC Sport
Source: BBC Sport