The Wythenshawe-born forward ended a 13-year association with City last summer when he move to Stamford Bridge and has gone onto score 12 times in 28 games, including a late equaliser in our 4-4 draw earlier in the season in a game Stones missed.
Palmer and Stones are now England team-mates after the 21-year-old won his two full international caps but they will come up against each other at the Etihad on Saturday at 17:30 (UK).
“Cole has been great in the games that I have seen and I am super happy for him,” the City defender said.
“I was quite close with Cole and sad to see him leave us, but that is his own path and journey in his career. I am happy for him and if he is happy that is the main thing.
“He was a great player for us while he was here and he has hit the ground running whilst he has been at Chelsea. It will be fun to play against him if we are both selected tomorrow.
“I am sure he has got a lot of fond memories while he was with us. He had been here a long time and from a young age.
“He will be coming back to the Etihad, but it is about us doing what we normally do, being a team together and putting our game plan into practice on the pitch.”
While Palmer has flourished, it’s been a tough season for Chelsea who currently sit 10th in the Premier League table.
But they have won four of their last six Premier League games and Stones says they have a squad full of quality as well as an experienced coach in Mauricio Pochettino.
“They have not had the easiest season so far,” Stones added. “We know the quality that they have got in the team that will be playing and they have a great Head Coach as well.
“We respect them like we do every other team, prepare well and go out there to try and implement our game plan to see where it takes us.”
Victory would extend our winning streak to 12 matches and Stones says he enjoys every minute of being part of a squad that challenges for all the major silverware.
“I am proud and just relishing in the moment and the time we are in,” he added.
“We have been so successful over the years and I have spent some time off the pitch when I was going through a difficult part of my career and learnt to cherish and enjoy every moment I get when I am playing.
“I think being part of, in my opinion, the best team and the best club in the world, is a privilege and one we definitely don’t take for granted.”
