Taylor, 57, is competing at his final event before he retires.
He will now face Jamie Lewis after the Welshman stormed into the semi-finals with a 5-0 whitewash of Darren Webster earlier on Friday.
Champion Michael van Gerwen beat fellow Dutchman Raymond van Barneveld 5-4 in the other quarter final.
"It's fantastic - it's the greatest feeling in the world hearing the crowd sing my name and I'll be honest I'm going to miss it next week," Taylor told Sky Sports.
"I'm absolutely fine and loving every minute of it."
An iconic figure, Taylor has played a key role in making darts the phenomenon it is today, and at the peak of his powers won eight successive world titles between 1995 and 2002.
'We both come from Holland and just want to beat each other'
In the evening's previous match Van Gerwen, 28, had won a dramatic contest which saw Van Barneveld draw level at 4-4 going into the final set at Alexandra Palace.
He will face Englishman Rob Cross in the semi-final.
At the beginning it didn't go too well," Van Gerwen told Sky Sports.
"Raymond was playing well and I was struggling. People could only dream about a quarter-final like this. He played really good. I didn't expect him to keep his motivation up so long.
"We both come from Holland and just want to beat each other."
Cross beat Belgian opponent Dimitri Van den Bergh 5-4 in his quarter-final.
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