"We're proud of the fact that he's a strong believer and he's prepared to stand up for what he believes in," Castle said.
"We want athletes in our code who are prepared to do that and that's really important. But at the same time, Rugby Australia's got a policy and position of inclusion and using social media with respect.
"So that's where we shared stories, shared ideas and shared positions and both of us recognise that what we want is a situation where we use our social media platforms in a respectful and positive way."
Folau will re-consider his use of social media as the dialogue continues, Castle said.
He caused an uproar when he said last week gay people were destined for hell "unless they repent of their sins and turn to God".
That followed the firestorm generated by his support last year in Australia for the 'No' campaign during same-sex marriage plebiscite voting.
"Even Israel acknowledged that maybe he could have put a positive spin on that same message and done it in a less disrespectful way," Castle said. "He certainly understands that he has caused some people some grief through this process."
Code-hopper Folau comes off contract at the end of this year, with the former NRL star and AFL player yet to announce his intentions for 2019 and Castle reiterated RA's desire to retain him.
- AAP