The Dane rejected an extended deal with the French manufacturer in favour of a move to the American team, a move that has shocked former GP2 champion Palmer.
"I'm surprised," Briton Palmer, who has signed the one-year Renault deal instead, is quoted by Denmark's Ekstra Bladet newspaper.
"I think he has made a mistake. We're a factory team and we'll be in front of Haas next year.
"It's like if you get an offer to go to Red Bull for a year -- it's better than two years with Toro Rosso," the Briton added.
Magnussen meanwhile hinted that Renault only kept Palmer because he chose to leave.
"I think he should be happy that I left," the former McLaren man quipped.
Magnussen also rejected the Brit's claim that Renault was a better option.
"I don't think they (Haas) were alone this year in having ups and downs," he said. "That's not really a problem.
"Or, if it's a problem, it's a problem that many people had," said Magnussen.
Magnussen's former-F1 driver father, Jan Magnussen, who now races for Corvette Racing in America, was delighted to see his son secure a long-term future.
"The agreement has a length where he can think more long-term for the development of the team, the car and himself," said the former McLaren and Stewart driver.
"I can't really answer for Kevin, but the American spirit meant a lot to me. I came to America after Formula One and the spirit really lifted me up again. The Americans are better at that than the Europeans," Magnussen Sr. told BT newspaper.
Bahrain International Circuit - Winter testing