This should be simple to troubleshoot. The requirements for the page template to work are straight forward:
The template needs the page title in the top of the file like you've shown (the title needs to be wrapped in a PHP tag, you probably just didn't add it with your example bu I want to make sure you havne't overlooked it):
<?php
/*
Template Name: Custom
*/
?>
The second requirement is that the file is in the root of the theme folder.
With those two requirements in place, it should work. If it isn't working you nave a few possible issues. I list a few off the top of my head:
- You might need to re-install WordPress in-case a file was corrupted
during your last update.
- It's possible someone has altered the WP-Admin layout using users
roles.
That's all I can thing of at the moment, let me know how it turns out.