"It's true I did come close to retiring," said Palacios who plays in the Premier League for Tottenham Hotspur.
"The reason why I carried on was firstly because it's always been my dream to be a footballer but mainly it was my family and close friends, taking their advice saying, 'keep going, keep going'. Football is what I do."
Palacios, 25, told reporters his religious faith also helped him overcome the loss of 16-year-old Edwin whose remains were discovered last May, 18 months after he was kidnapped from the family home in the coastal town of La Ceiba.
Nine months on from learning of his brother's terrible fate, Palacios is looking forward to what could be a memorable year on the field.
In June, Honduras will take part in the World Cup finals for the first time since 1982 while his club Spurs are mounting a serious challenge near the top of the Premier League and could win a coveted Champions League place for the first time.
Palacios had been hoping to line up against Liverpool at Anfield on Sunday in what promised to be one of the most important fixtures of the season, but the game was postponed because of the freezing conditions in Britain.
He was relishing the chance of pitting his wits against Liverpool striker Fernando Torres, who he will most likely face in the World Cup when Honduras meet Spain in their first round group match in Johannesburg on June 21.
"We had been up for the game all week," said Palacios, trying to keep warm in a grey trench coat as he spoke through an interpreter at Tottenham's White Hart Lane ground.
"You fix your mind and focus on a game and work hard all week. It's hard.
"Our sights are set high at Tottenham. We've done very well this season, maybe dropped one or two points instead of getting all three, but now we need to take it to the next level."
MIDFIELD HEART
Palacios has been a revelation at the heart of the Spurs midfield since joining the club for 14 million pounds last January. His arrival has coincided with an upturn in their fortunes after years of under-achievement.
Manager Harry Redknapp, who made Palacios one of his first signings at the club, has said many times that Spurs had missed such a player with battling capabilities since the days of hard men Graham Roberts and Paul Miller in the early 1980s.
Yet the steel Palacios provides on the pitch is in stark contrast with the Honduran's humble nature off it.
"On the field you do your job," he explained.
"I'm a professional footballer. You have your own character. Off the field I'm just an ordinary guy and I get on with my life. The two things have nothing to do with each other."
Many players with far fewer personal setbacks would have buckled under the strain but Palacios appears to have used Edwin's death as an incentive to push his career on.
"It has, yes, been an extremely tough year but all you can do is keep focused and keep moving forward. You ha
