Yes, K-TET rank is considered for PSC selection of teachers. After pasing ‘K-TET’, you will need to satisfy all eligibility requirements as per State Recruitment Rules for getting recruited as teacher

Government of Kerala conducts Kerala Teachers Eligibility Test (KTET) for the candidates who wish to become teachers in primary (class I -V) and upper primary (VI-VIII) schools in the state of Kerala.

Eligibility and Qualifications for Kerala TET:

Kerala TET (KTET) Qualification Teachers of Classes I-V (Paper I) --

-You should have passed Senior Secondary (or its equivalent) with minimum 45 percent marks.
- Final 2 year students of Diploma in Elementary Education / 4-year Bachelor of Elementary Education (B.El.Ed.) / 2 – year Diploma in Education in Special Education are also eligible.
OR
Candidates with BA / B.Sc. with minimum 50 percent marks and B.Ed qualification can also apply.

Kerala TET (KTET) Qualification Teachers of Classes VI-VIII (Paper II) ---

Must have B.A. / B.Sc or appearing in final 2 year D.Ed. / B.A. /B.Sc. with minimum 45 percent marks and passed / appearing in B.Ed / Senior Secondary with minimum 50 percent marks and passed or appearing in final 4-year Bachelor in Elementary Education (B.El.Ed) / 4-year BA/ B.Sc.Ed. or B.A. (Ed.)/B.Sc. (Ed.) / B.Ed. (Special Education) with 50 percent in BA or B.Sc are eligible for KTET.