So I was doing some research on how to turn on logging for a telnet session on a linux box and I found this article. Basically it suggests that the user look into the script command.
I read the man page and found that script is actually pretty badass. Rather than building logging into your telnet application, why not build a wrapper that you can use with any program? That's what script is. Just run the command tell it where to output the data.
script -c "telnet myhost.domain.com" /tmp/output.log