Sanchez was speaking after Palmer's first-half hat-trick in victory at Wolves on Saturday.
Palmer is now the only player in Premier League history to score three hat-tricks in the first half of a match, while he has also scored more Premier League hat-tricks (four) than any Chelsea player.
Sanchez said: "He’s brilliant. He's not even at 100 percent yet, he has just come back from injury, and still managed a hat-trick.
"We're very happy. Everyone knows how good he is, so he needs to keep it up. He's only going to get better."
The Spain goalkeeper also had a word for manager Liam Rosenior.
He added, "His style is about dominating the ball and he came with a positive attitude and energy. The boys have really embraced it, and we're enjoying it a lot."