The returning Premier League club are believed to have made a bid of around $500,000 (£300,000) for the Australian international with The Age suggesting Victory officials have labelled the proposal as ‘derisory’.
There were reports that Palace were to table a $1.5million (£890,000) offer for Milligan but more recent reports suggest that $500,000 is the latest bid.
"'I can deny that (a Palace bid of $1.5m)," he said. "We haven't got a for sale sign up.
"'I understand that Millsy is a highly sought after player. He enjoys this club, and he understands he is in this position because of this football club.
"So there is a whole range of things (to consider). We have a responsibility to our own supporters, we are going to have 28,000 members this year and 50,000 at our first game.
"I take that responsibility very seriously. He is the best player at our club, I think he is the best player in the country at the moment, so I don't think we need to be out there trying to flog him and we are certainly not doing it for the money.
"We haven't had a bid of $1.5 million from Palace. We have had a bid from Palace, but it's fallen short of our valuation."