The result also brought to an end City's magnifcent run of 18 straight Premier League victories with Pep Guardiola's men ending 2017 14 points clear from nearest challengers Chelsea.
And England international Walker, who produced a fine individual display against the Eagles, insisted City would seek to maintain their momentum going into the New Year.
"We set such high standards and have not got the win but full credit to the lads for the standards we set," said Kyle.
"It's good in a way to drop points to get us down to earth and get that motivation. A lot of teams defend deep with 10 men behind the ball.
"We have had to deal with a lot and have come out on top. Full credit to Crystal Palace. We can't let those standards drop. We as a team and the manager won't let that happen."
Walker also had words of praise for goalkeeper Ederson for his penalty heroics with the Brazilian diving smartly to keep out Milivojevic's spot-kick.
And he said he had relished his personal battle with tricky Eagles winger Wilfried Zaha.
"You have to trust your goalkeeper. All the penalty practice we in training helped him!
"I have played against Wilfried Zaha a number of times and he always gives me a good game. So it's good to test yourself. It was a good battle."