To see what the current status is : "chkconfig --list |grep squid".
To start squid automatically in runlevel 3 : "chkconfig --level 3 squid on"
To see again what the current status is : "chkconfig --list |grep squid".
ps. telnet service on a server is not very recommended. You better use ssh with Putty as ssh client on a Window machine, or ssh itself on a Linux/Unix machine.
ps. Check out the /etc/inetd.conf file for enable telnet if you really want.
(If I remember correctly Red Hat 7.1 does not use xinetd yet, only later version of Red Hat).