While Tiger Woods and Phil Mickelson will headline the $6 million invitational, the top six ranked players in the world, including world number one Luke Donald and number two McIlroy, are all absent from the penultimate US Tour event before next month's Masters.
"I'm disappointed that they are not here, no question about it," Palmer said.
"I'm certainly not happy that those fellas chose not to come this year. We are doing everything we can to entice them to come and play."
Palmer, a seven time Major winner, said he was especially disappointed that McIlroy, the reigning US Open champion and a crowd favourite in America, did not enter, taking a gentle jibe at the way he told him.
"I had a letter from Rory seeking my consultation and (he) told me he wasn't coming. And of course that made me feel great," Palmer said with a wry smile.
"And if you believe that, I'll talk to you outside afterwards."
Also missing from the tournament are Donald's fellow Englishman Lee Westood, ranked three in the world, as well as Germany's Martin Kaymer (four), American Steve Stricker (five) and South Africa's Charl Schwartzel, last year's Masters champion.
Palmer, who played a leading role in popularising golf around the world during his playing days, said he was also dismayed that more British players had not entered his tournament.
"When I think back over the years, when back in the early years of the (US PGA) tour and I went to the Open to kind of enhance or to create additional interest in international golf; and to think that those people are now the top international players in the world, we like to have them here," he said.
Despite his disappointment at McIlroy's absence, Palmer, 82, said he had been greatly impressed by the young Northern Irishman, who won his first Major last year and briefly held the top ranking before Donald regained it by winning last weekend.
"I think he has handled himself very well. I don't know him really well (but) I know him and have talked to him a little bit," Palmer said.
"I think he has done a wonderful job at 22 years old and starting a career like he has just gotten launched on to."
Palmer said McIlroy, who took the week off to watch his girlfriend, Danish tennis player Caroline Wozniacki, compete at the Sony Ericsson Open in Miami, had indicated he would play at his tournament in the future.
"I had a letter from him as I mentioned earlier, and talking about coming up and having a talk with me," said Palmer.
"I'm not sure that I know exactly what he wants me to tell him or what he wants to hear from me, but I look forward to seeing him and talking to him.
"He also mentioned in the letter that he will be here to play in the years to come."