The 19-year-old never got a chance to make an appearance for the Blues, He did however, make it to the substitutes bench on two occasions.
Palmer was in England the Under-21 side which won the Toulon Tournament in May.
Huddersfield head coach David Wagner spoke to the club’s official website: “I believe Kasey is one of the best young English talents and I think our supporters will enjoy watching him in the new Sky Bet Championship season.
“He is a very skilful player with good football intelligence and we now have the time to work hard with him in training to help him understand our identity on the pitch.
“As I said about Danny Ward recently, I believe we can help Kasey make the next step in his career and send him back to Chelsea a better player once the season is over. I would like to thank everyone at Chelsea for allowing Kasey to come to us.”