Taylor was shown a red card in the opening moments of the 2-2 draw at St Andrews after he caught the Gunners striker, who apparently suffered a badly broken leg.
Immediately after the game, in which James McFadden equalised in injury-time, a furious Wenger said: "This guy should never play football again. What is he doing on the football pitch?"
Blues boss Alex McLeish and former manager Steve Bruce jumped to the defence of the player, who was described as "distraught", and Wenger has now softened his stance.
"It was a highly emotional afternoon and we were all shocked by the injury to Eduardo," said Wenger, who expects the Croatian to miss this summer's European Championships.
"On reflection, I feel that my comments about Martin Taylor were excessive. I said what I did immediately after the game in the heat of the moment."