It's not really a matter of whether Palps was racist or not. He just uses whoever and whatever he wants to amass power. The idea that he "didn't like nonhumans" was totally an EU invention. Frankly, I doubt he "liked" anyone besides himself. He sure doesn't seem too broken up when Maul gets sliced and diced, and he invites Anakin to kill Tyrannus. Plus, he's only too happy to throw Vader under a bus to make Luke his new apprentice.

Perhaps he found humans more malleable than other species, and that's why all the Imperials in the OT are human.