Chief of the General Staff General Sir David Richards said his "private view" was that the time to negotiate had arrived.
Debate on the timing of withdrawal from Afghanistan has been fuelled by David Cameron's comments that he wants British troops home by the time of the next general election, scheduled for 2015.
US President Barack Obama has set out a timetable under which the "surge" of US troops ordered last year would lead to gradual withdrawals from the middle of 2011.
Gen Richards told BBC Radio 4's The World this Weekend he was confident progress was being made to train Afghan forces to replace coalition troops.
He said military and development operations should continue if negotiations began with the Taliban, talks which could possibly be conducted through third parties.
He said: "If you look at any counter-insurgency campaign throughout history there's always been a point at which you start to negotiate with each other, probably through proxies in the first instance and I don't know when that will happen."
Stressing it was "purely a private view" he said: "I think there's no reason why we shouldn't be looking at that sort of thing pretty soon.
"But at the same time you have got to continue the work we are doing on both the military, governance and development perspectives to make sure that they don't think that we are giving up.
"It's a concurrent process and both equally important."
Asked whether talks would be acceptable to the UK's allies in the US without a decisive military defeat being inflicted on the Taliban, Gen Richards said: "I think on one level, the tactical level, the lower military level, we need to continue to make the Taliban feel that they are being punished for what they are doing in a military sense.
"So that needs to continue, but whether we can turn that into some sense of strategic defeat I'm less certain."
Acknowledging the imbalance in the restraints imposed on the two opposing forces, Gen Richards said: "It's always so easy to be an insurgent.
"It's much harder for us. We have a great legal and moral responsibility not to inflict one unnecessary civilian casualty.
"They don't worry about that because it is all about creating an impression in their own people that we are going to lose and we are going to pull out and I sometimes think that they are better at that, by some margin, than we are."
But Gen Richards added: "The people of Afghanistan do not want the Taliban back."
Increasing the size and quality of Afghan forces will enable a "stabilised Afghanistan under a competent government" that will allow British troops to come home with a "job well done".
Earlier, Gen Richards's predecessor, Sir Richard Dannatt, said "maximum pressure" needed to be exerted to prevent the Taliban attempting to "sit out" the remaining period of international operations in Afghanistan before returning as troops left.
Soldier dies of blast injuries
A British soldier has died from injuries sustained in an explosion in Afghanistan earlier this month, the Ministry of Defence said.
The serviceman, from 4th Regiment Royal Artillery, part of Combined Force Nahr-e Saraj North, died on Saturday at the Queen Elizabeth Hospital, in Birmingham. His family has been told.
He was injured on June 10 in a blast in Helmand Province.