He stood for a long while holding the towel in his mouth, half covering his face wagging his tail wildly as I encouraged him to pull. Tail wags don't pull towels though, so we had to try a different approach.
He has a great sense of humor and was pleased with the joke I was playing on him, so he kept trying until he figured out where to put his feet. Even with success, I think this task is too hard for him just yet. We will go back even further and start with a hand towel, then build up from there. He will be a towel boy soon enough.