Any surplus would be split evenly between the council's future transport plans and Shrewsbury Town's Community Fund.
Some 17, 000 fans are expected at a the concert at Shrewsbury Town's Greenhous stadium on 12 June.
The 31-year-old, who played for the old Telford club and also Shrewsbury Town, has signed an 18-month deal.
Shropshire Council said it was now talking to Shrewsbury Town Council and West Mercia Police about the issue.
The council was also working in partnership with Shrewsbury Town Council, Shrewsbury Carnival and BBC Radio Shropshire to deliver the event.
But, ahead of Saturday's crunch clash at border rivals Shrewsbury Town, he is yet to find a way to reverse the club's dismal streak of results.
But the average home attendance this season is just 1, 950, despite three of their nine home games having been 'derbies' against Bury, Shrewsbury Town and Port Vale.
The Blues got their season up and running with a win against table topping Shrewsbury Town last weekend, Palmer scoring a brace in a man of the match performance.
BBC: Gillingham's Chris Palmer confident of team's promotion
Shrewsbury Town are still searching for a new manager after Gary Peters left the club last week by mutual consent as the club slipped to 16th in League Two.
Former Rochdale, Carlisle, Preston and Shrewsbury Town boss Simpson, who joined the club in July, managed just three wins in 19 League Two games, leaving the club in 21st.
As rumours continue over who will be the new manager, Burton Albion's Chairman Ben Robinson told BBC Radio Shropshire he had not been approached by Shrewsbury Town to speak to Nigel Clough.
The Environment Agency has warned that with rising river levels, some roads could be affected by flooding, including several in Shrewsbury and the town's Frankwell car park.
Jason Scott Cooke, 23, of Sutton Farm, Shrewsbury, was stabbed five times at the town's Monkmoor recreation ground and died soon after arriving at Royal Shrewsbury Hospital.
Shrewsbury hospital serves patients from the town and parts of Wales and moving its services would make it less accessible for them, protesters have said.
Conservative MP for Shrewsbury Daniel Kawczynski, said the town had a "very proud tradition" of hosting the Army and the latest news came as a "great disappointment".
BBC: Shrewsbury Copthorne Barracks sees more troops move out
Shrewsbury's MP says the closure of the town's prison will have a "detrimental effect" and wants talks with the Prisons Minister Jeremy Wright.
BBC: HMP Shrewsbury: MP calls for talks with Prisons Minister
The River Severn in Shrewsbury could be used to generate electricity under plans released by the town council.
Thousands of Shrewsbury residents will need permits to park outside their own homes during an Elton John concert in the town, Shropshire Council has said.
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