Speaking to the club's official website, Palacios said: "Why would I want to leave Wigan?. I've enjoyed every minute since linking up with manager Steve Bruce again and I love the Wigan fans.
"The climax to last season was amazing and I am proud to be playing with Wigan the best league in the world.
"Pre-season has been fantastic and I've enjoyed the Austrian tour and pre-season games immensely. But I can't wait for the season to begin and the first minute of the first game at West Ham United followed by the big home game against Chelsea."
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