The Argentine has no intention to leave his current club any time soon and has stressed that he has a good relationship with Andrea Stramaccioni
The 31-year-old joined the Giuseppe Meazza side from Genoa at the start of the campaign and has since developed into a key player at the club, netting 12 goals in 25 Serie A appearances.
"I would not even consider joining AC Milan if they made me an offer," Palacio told Inter Channel.
"I signed a three-year contract at Inter and I'm very happy here. I like this club a lot.
"I found it easy to settle in right from the very start: there's a great group of down-to-earth lads and of course lots of other Argentines too."
The striker then went on to discuss his relationship with head coach Andrea Stramaccioni and stressed there are no problems between the two.
"Our relationship is very good. We got on right from the beginning."