Palmer will stay at Ewood Park until the end of the season as he prepares to join his third different loan club at the age of just 21.
Announcing the news on their official website, Chelsea's statement said: The 21-year-old midfielder was an important member of our Academy sides that won back-to-back UEFA Youth Leagues, scoring the winning goal in the 2016 final. Shortly afterwards, he was named on the bench for a first team game at Swansea.
"In 2016/17, Palmer’s first full season in the senior game, Palmer helped Huddersfield win promotion to the Premier League. He returned there for the first half of the following campaign, which he finished on loan at Derby County.He will now continue his development at Ewood Park with newly promoted Blackburn."
The England Under-21 international has plenty of experience in the Championship and experienced play-off campaigns with both Huddersfield and Derby. The youngster will be eligible to play in the Carabao Cup and the FA Cup, unless Blackburn are drawn against his parent club in either