1. Login to the server through SSH and su to root.
2. Edit /etc/xinetd.d/telnet by typing vi /etc/xinetd.d/telnet
3. Search for the line: disable = no and replace with disable = yes
4. Save /etc/xinetd.d/telnet and exit
5. Restart the inetd service: /etc/rc.d/init.d/xinetd restart
6. Also turn off telnet through: /sbin/chkconfig telnet off

http://www.itsecuritycenter.com/disabling-telnet-in-linux.html

The telnet is insecure and unencrypted protocol. The use of this unencrypted protocol could allow users to sniff network traffic and to steal sensitive information like username and password.

Disabling Telnet in Linux

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