ssh is one solution. The other is to tunnel your telnet connection thru an ssl server port on the remote system. This way the connection from you to the server is protected using SSL and the data is then forwarded from the server to the local port running telnet. You will of course need to configure this on your server so port forwarding can occur.
For an example of the client side see the com.jscape.inet.telnetssl.TelnetSsl class found in Secure iNet Factory http://www.jscape.com/secureinetfactory/
See the JavaDoc for details.