Palacios joined Spurs last week in a deal worth an initial £12million.
Bruce said: "We have been watching Ben for some time, and believe he has the maturity to step back to the highest level and make an impression.
"He's a midfielder who scores goals, has quick feet, plenty of power and is a terrific prospect.
"I wanted to move quickly to start filling the gap left by Wilson Palacios, and Ben is the start of that process."
After beating Middlesbrough to the player, Bruce added: "It speaks volumes about the progress of the club that we can compete with established Premier League clubs for players.
"I am delighted Ben has agreed to join us. I think our supporters will take to him quickly, because he's a real hundred per center."