The 25-year-old had been doubtful for Wednesday's Group H clash in Nelspruit due to a thigh injury, but coaching staff are pleased with his progress.
Palacios was able to play a full part in the team's final training session before flying east from Johannesburg to the Mpumalanga province.
On the mend: Palacios is set to boost Honduras ahead of their clash with Chile
Team doctor Oscar Benitez said: 'Wilson is 100 per cent. He is training at high intensity and we are very happy. He is a lion. He is ready.'
The prognosis, however, is not quite as good for key striker David Suazo, who has been hampered by a similar muscular problem in recent weeks.
Benitez added: 'David's recovery is on the right track, but we have to be calm. We do not want to rush him and suffer a relapse.'
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