In the 63rd minute, Huddlestone and Palace captain Luka Milivojevic clashed and the Eagles midfielder kicked out at his rival before he moved his head towards the Derby player.
The pair were both shown yellow cards, but referee Michael Oliver took it upon himself to look at the pitchside monitor – a first in England this season – before changing his decision to a red card.
Huddlestone told RamsTV: "With their captain, he had left a few late ones on myself and a few other lads and he half tried it again.
"At the time it felt like he kicked out when he was on the floor. I didn't think it was anything worse, but I think I have a little scratch somewhere.
"Then he seemed to try a headbutt. It was strange the VAR had a look and gave us both a yellow card and I felt that was harsh and it should have been a red for him, but then the referee finally checked the monitor himself and made his own decision."
From the initial incident to play getting back underway, it took five minutes and although it was a lengthy delay, Huddlestone was happy the pitchside monitor was used.
He added: "I was surprised there was only five minutes added on at the end because that seemed to take five minutes by itself.
"As I say, we have the VAR situation where they have not seen it initially, but I think it is a better solution for the referee to have a look himself.
"It is still only one person rather than it transmitted miles away and somebody else takes centre stage. It did seem to take an age, but apart from my yellow, the right decision was made in the end."
Former Tottenham midfielder Huddlestone lined up alongside Wayne Rooney at Palace and the pair helped dictate play as Derby secured a cup upset in the capital.
"It was an enjoyable experience and full credit to him lasting another 90 minutes after not playing for a few months," he said.
Wilfried Zaha also missed the third-round tie after playing through the pain at Norwich on New Year's Day.
It leaves boss Roy Hodgson in need of reinforcements and he said: "We've said since the summer transfer window we are looking to sign at least one, possibly two strikers and two full-backs.
"Nothing changes. I said it a year ago, I said it in the summer and I say it again."