The Argentine believes his side have a good chance of mounting a title charge this season under new coach Walter Mazzarri
The Nerazzurri slumped to a ninth-placed finish in Serie A last season - their lowest since 1994 - resulting in the dismissal of coach Andrea Stramaccioni, who was replaced by former Napoli boss Walter Mazzarri.
The 51-year-old recorded a 4-0 Coppa Italia win in his first game in charge last weekend, and Palacio believes his side are more than capable of competing for Scudetto glory under the auspices of their new boss.
“We are in the Scudetto race too. I know it will be difficult because there are many great teams, but we just have to take it one game at a time," he told Sky Sports Italia.
"I like the way Walter [Mazzarri] trains the squad. He works hard and has very clear ideas on his football."
Striker Diego Milito has been out of competitive action for the club since February due to injury, and Palacio revealed the entire squad is eagerly awaiting the return of the marksman.
"We are all waiting for Diego [Milito]," he added. "He is the type of player who will always make the difference."
Inter kick off their new campaign by hosting Genoa at San Siro on Sunday.