Speaking on the eve of the Arnold Palmer Invitational at Bay Hill, Palmer said 14-time major champion Woods needs practice to rebuild that confidence.
Palmer said he supported Woods' decision to take a break from competition, even though that means Woods won't be teeing it up this week at Bay Hill, where he has won eight times.
Palmer said he appreciated the fact that Woods called him to explain why he wouldn't be there.
"First of all, he said, 'Arnold, you know, I can't think of anything that I'd rather do than be there to play' and then he explained that he didn't feel like his game was ready," Palmer said on Wednesday of his brief talk with Woods.
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"He really wanted to work on it and get it ready to play and I don't blame him. I think if I were in his position I would probably have said somewhat similar things.
Palmer said he "didn't say much of anything" during the call, but the seven-time major champion was asked what advice he would offer Woods.
"There's only one thing I can say and that's practice, and confidence," Palmer said.