The Argentina forward put pen to paper on a one-year extension with Walter Mazzarri's side on Friday to extend his stay at the club until 2016.
Palacio has scored 12 goals in 27 Serie A games this season and the 32-year-old is eager to kick on after committing his future to the San Siro outfit.
He told Inter's official website: "There are lots of players who are more important than me but I'll always play the same way, giving it everything I have in every game. I have to keep working and doing my best for Inter.
"I'm really happy, delighted to have renewed for another year. I'll give my all for this shirt, for this great club."
Palacio joined Inter from Genoa for a fee reported to be €10.5 million in May 2012.
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