But he believes the Englishman's hopes of one day winning the Ballon d'Or could be stunted by two other European stars who could dominate the next decade at the top.
Speaking exclusively to talkSPORT Emmanuel Petit said the Chelsea playmaker is 'definitely' the best player in the Premier League right now.
The Frenchman, who represented Arsenal and Chelsea and lifted the World Cup with his national team, spoke to talkSPORT about the England star's current form.
"He can change the game any time he wants," Petit said. "Every time he gets the ball, you get a feeling he can have an impact straight away on the result.
"You can see that every time he gets the ball, all his teammates want to play with him, the movement around him.
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"You can see the opponents as well, every time Cole Palmer gets the ball, you can feel the opponent is stressed."
He continued: "I've met different players, top players with the same abilities and personality on the pitch.
"For example, I played with Rivaldo at Barcelona, and Zidane in the national team. Every time we used to give them the ball, it changed something on the pitch.
"It brings more confidence from the teammates because you want to play with those kinds of players, you want to bring movement around them and you want to be part of it with them."
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Discussing whether Palmer can be a part of the Ballon d'Or conversation next year, Petit explained there is 'a long way to go'.
He said: "All those kinds of players, especially up front, strikers that can score goals or give assists, they are all focused on the Ballon d'Or.
"Midfielders and defenders are not like that, only strikers. I can understand that. It's a dream. It can be selfish sometimes, but it's a dream for many strikers and attacking midfielders.
"He [Palmer] said recently that he was dreaming about that. I hope he can reach that dream, but there are many, many big players on the market".
Petit referenced Palmer's nomination for the 2024 Ballon d'Or - which was awarded to Manchester City's Rodri - which has given the Three Lions ace hope he can get his hands on the Golden Ball one day.
"It's a huge honour," Palmer said after receiving a nomination. "Winning it would be brilliant, and I believe with hard work and consistency I could get there."
On his prospects for winning the coveted award in future, Petit explained the three players who could stand in Palmer's way - all of whom play in the Spanish top-flight: "[Lamine] Yamal at Barcelona, Vinicius or maybe [Kylian] Mbappe, if he comes back.
"He [Palmer] has to show his abilities every single weekend. This is what he's doing right now. He's been playing like that now for 16 months already.
"If he wants to reach his dream, he has to do that on the highest level. Which means the Champions League and as well with the national team."
Since making a £40million deadline day move to Chelsea from boyhood club Man City, Palmer has scored 36 goals and assisted 21 more in all competitions.
He has continued to slash records for the Blues, recently becoming the second-fastest Chelsea player to score 30 league goals, with Jimmy Floyd Hasselbaink the only one to achieve this in fewer matches.
His 11th and 12th penalties - both of which came in the 4-3 win over Tottenham - also made him the Premier League record holder for the most spot kicks scored without a miss.
That beat Man City legend Yaya Toure's previous record of 11.
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To add to these feats, Palmer also notched the most goal contributions in a calendar year for Chelsea - beating Hasselbaink's record this time, with the Dutchman setting the previous record tally 23 years ago in 2001.
Palmer sits at 11 goals and six assists in 15 fixtures so far this season.