Sultan is an Arabic title. Khan is a general Turkic-Mongol title, it was used within Safavid state, but Shah Ismail did not use this as a title for himself because it was in use with Ottoman Sultans. Instead Khan was used for lower rank because of political purposes. Probably the answer for your question is political purpose.
Here is titles of Safavid Empire (except the Shah himself), all Turkic:
Khan, Beglerbegi, Qizilbash, Qullar, Eshik Aghasibashi, Qorchu, Qorchubashi, Yasavul, Kanuqibashi, Chalchibashi.
Here is titles of Safavid Empire (except the Shah himself), all Turkic:
Khan, Beglerbegi, Qizilbash, Qullar, Eshik Aghasibashi, Qorchu, Qorchubashi, Yasavul, Kanuqibashi, Chalchibashi.