"If Palmer comes back, he would be the starting quarterback, and we would groom (second-round pick) Andy (Dalton) to be the quarterback of the future," Lewis said.
Lewis made his remarks during a conference call that he and NFL Commissioner Roger Goodell held with season ticket holders.
When asked if Palmer would be traded, Lewis replied, "We're not going to entertain that thing publicly. You sign a contract and you're bound to the length of the contract. Guys have the opportunity to retire and walk away and that's the situation that Carson is in."
"I've talked with Carson a number of times and he feels like his time here is over," Lewis said. "He feels like the best thing is to retire and spend time with family. The good thing for us is this decision was made in January. From that we benefited."
If he's there and not happy, he's not going to give us his best," Benson said, according to the Bengals' official site.
Palmer completed 362 of a team-record 586 attempts for 3,970 yards and 26 touchdowns this past season, but also matched a career high with 20 interceptions. Palmer announced shortly after the conclusion of the Bengals' 4-12 season that he wanted out or he would retire.
The Associated Press contributed to this report.