I think Tanaka is quite a knowledgeable person and Butler.
He knows about the many secrets residing in the Phantomhive manor and so perhaps that's why he still remains in the Phantomhive manor as the Butler.
I feel like he would've just retired but perhaps, just like everyone else on Ciel's side, he's hiding some secret. Maybe for himself or of Ciel's.
It's quite difficult to explain without spoiling the plot - read the manga, it should be updated tremendously by now and you should probably understand the significance of Tanaka's character.
I might just be making his character seem more important than it is, but all of Ciel's old family and his past in general have some sort of hidden agenda - they all know something that we don't: Elizabeth, her family, Tanaka, obviously Sebastian knows it all, but Ciel's family comes into play and Tanaka was there from the very start of it all.
Although he's ill and perhaps a bit forgetful, he was Ciel's father's Head Butler (which is a huge deal!) It proves to me that he has some knowledge about many secrets, and that he probably acknowledges that Sebastian is a demon and that Ciel isn't who he says he might be...
But he holds Ciel very close to his heart, seeing as though Ciel still sees Tanaka as his grandfather - and he provides him a place to stay even though he has no use to Ciel's "game" (revenge). Sure, he's strong, but he's still old and human.
It's obvious that Tanaka will have a part in Black Butler, maybe not soon - but later it will all come through. If you've watched the anime, it shows him recapping the episodes in one episode and he mentions that Sebastian will go through a "challenge" in the end of it all.
Yeah, this is very early on in the season. But it's a foreshadowing of events. And I'm believing that Tanaka is somewhat the narrator to Ciel's life - as if, he already knows his revenge being played out and that he knows Ciel's biggest fear... and he knows everything because he survives it all (maybe not on Ciel's side...)