Hamilton goes into 2017 not defending the world championship for the first time since the 1.6 litre V6 engine formula was introduced, but Palmer doesn't feel that his performance will be any weaker as a result.
"So long as he's motivated, he'll be strong," Palmer told the BBC. "He enjoys more of life outside Formula One than a lot of other drivers.
"At the moment he is very competitive with it and is able to combine Formula One with quite an elaborate lifestyle outside of the car. But you still need the right circumstances. You need a good team behind you and you need to have a reliable car for the year to do it - it's not just up to him."
Following Jenson Button's retirement, Palmer and Hamilton are set to be the only British drivers on the grid - The lowest number since 2010, (excluding the 2014 US and Brazilian Grands Prix)
Bahrain International Circuit - Winter testing