A search of the App Store for telnet and ssh turns up just one free app. It has horrible reviews, but it does say it does SSH2.
Looks like you will have to pay if you want a quality app. The only other app I saw that specifically said it supported SSH2 was a router app (MyRoutersPro), but it does have a telnet mode so it might work. You might go to the developer support page for the other apps and ask if they do, or soon will support SSH2.
Otherwise, looks like your options are limited.
I wonder if there are virtual telnet apps on the web? Worth looking at, but you'd have to wonder if they are more, or less, secure than SSH2.
You could also use Splashtop to access a telnet app on a desktop computer. Clumsy, but doable; and Slashtop is cheap.