Romeo Lavia and Wesley Fofana were also left out reportedly due to "load management" reasons with Chelsea set to participate in a new expanded Club World Cup in the United States, which runs from June 15 to July 13.
Palmer scored in England's Euro 2024 final defeat by Spain just 33 days before the beginning of the Premier League season.
The 22-year-old has pulled out of the England squad for Nations League matches against the Republic of Ireland and Finland this week.
Global footballers' union FIFPro said on Thursday that football's governing bodies are "failing to meet their duty of care" towards players by denying them sufficient rest as many tournaments continue to expand.
The union suggests bringing in a guaranteed minimum amount of time off, and even the introduction of a maximum number of games for players.
Palmer played 57 matches for club and country last season.
The head of England's Professional Footballers' Association has cited the blistering form of Manchester City's Erling Haaland and Liverpool forward Mohamed Salah -- who both had a summer off from international commitments -- as proof of the benefit of rest periods for players.
Chelsea will face Gent, Panathinaikos, FC Noah, Heidenheim, Astana and Shamrock Rovers in the new-look league phase of UEFA's third-tier European club competition.
Palmer could still be added to the Blues' squad for the latter stages should Enzo Maresca's side progress.
