The Palace boss wanted to keep hold of Halls until the end of the season, but let him go when it became clear he could only sign for another two months.
Warnock told the Croydon Guardian: "I spoke to him [Halls] and I spoke to Steve Coppell as well but because we had already had him for a month's loan we couldn't have him for the rest of the season, only for 93 days. With that in mind I wouldn't really want to take him until March to cover the rest of the season.
"Whilst we are happy at the moment and comfortable with what we have got, there could be a situation that develops where we need another body in."