Palmer, 27, joins Sheffield Wednesday team-mate Barry Bannan in the 27-man squad, while uncapped Sheffield United midfielder John Fleck has kept his place.
Soctland boss Alex McLeish said: “Liam Palmer has been in the system before with the young ones and I’ve got to be honest, in recent times he wasn’t flagged up.
“All of a sudden we recognised Liam was playing extremely well for Sheffield Wednesday.
“He was a midfielder converted to a full-back so there was a little bit of that to discuss. The fact he was played right-back, left-back and midfield shows he is a player of versatility.”
Hibernian striker Marc McNulty, formerly of Sheffield United, has also claimed his first Scotland call-up.
The forward - who joined Hibs on loan from Reading in January - joins Oli McBurnie, Oliver Burke and Johnny Russell as the forward options amid the absence of the likes of Leigh Griffiths, Steven Fletcher and Steven Naismith.
Jordan Archer, Scott Bain and Jon McLaughlin are the three goalkeepers after Allan McGregor announced his international retirement on Monday.