Palacios was signed on loan for the first half of the campaign from Olimpia by the then Blues boss Steve Bruce, but when Bruce left for Wigan in December he took Palacios to the JJB Stadium after his replacement McLeish decided against signing the Honduras international.
The former Scotland boss said: "I didn´t know a lot about Palacios and my intention in January was to bring in experienced Premier League players or those of proven quality to make us better this level."
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