The Eagles defender, sent off in midweek, struck on 73 minutes with a 20-yard free-kick before Tommy Black missed a penalty ten minutes later.
A so-so first half saw few chances. Black had an early shot saved by Tony Warner and midway through the half, Granville forced Warner into action again with a fierce 25-yard free-kick.
Millwall's first shot on target arrived on 36 minutes with David Livermore shooting straight at Alex Kolinko.
The second half was more free flowing, with Palace the likely to score. Aki Riihilahti, Dele Adebola and Black all had useful chances before Granville eventually made the inevitable breakthrough.
Robbie Ryan, who worked tirelessly for the Lions found substitute Wayne Routledge on the edge of the box, and from the resulting free-kick Granville made no mistake with a powerful left-foot shot which rattled the underside of the crossbar before entering the net.
Milwall's display was disappointing although Paul Ifill brought a brilliant save from Kolinko.
Trevor Francis' boys should have killed off the game seven minutes from time when Black's penalty, awarded after Marcus Phillips floored Adebola, was well saved by Warner who dived successfully to his right.
Trevor Francis Palace manager said after the victory: "We knew it was going to be a difficult game. Millwall played against a side that was very different from the side they played 12 months ago.
"The improvement was there for everybody to see, showing we have changed things and we are not a soft touch any more.
"We protected our keeper very well and the three at the back played well. I thought the goal by Danny Granville was very special, it was a good response from his sending-off in midweek.
"Tommy Black has been good in training all week, we practised penalties yesterday and he didn't miss one. But on this ocasssion the keeper must take credit. Tommy is our third penalty taker behind Freedman and Johnson.
"I'm hoping to get our key players out of the treatment room to assemble an attack to get into the top six."