Milligan has been a key player for Australian coach Holger Osieck in the Socceroos qualification for the World Cup and has now become the subject of interest from Palace ahead of the English Premier League season beginning this weekend.
The promoted side had reportedly submitted an offer of AU$1.5 million for the versatile midfielder but it's understood Palace's actual offer was less than AU$500,000 - and would not even have matched the fee Victory received from UAE outfit Al Shaab for Billy Celeski.
Postecoglou today hailed Milligan as the best player in Australia, and will not let him go without a fight.
"We value him very, very highly," he said. "And unless somebody wants to look to prise him away from us we'd expect them to meet our valuation of him.
"He's the best player at our club, he's the best player in the country at the moment. I don't think we need to be out there trying to flog him and we're certainly not doing it for the money."
When pressed on how much it would take to secure Milligan's services, Postecoglou said: "I'm not sure because we haven't got a for-sale sign up. If somebody knocks on your door and says 'I want to buy your house', do you give them a price?"
"We've haven't had a bid of $1.5 million from Palace. We've had a bid over the weekend but it's fallen short of our valuation."
Postecoglou acknowledged the reasons behind Palace's pursuit of Milligan, but expects the player to honour his commitment to Victory ahead of the 2013-14 A-League season.
"I understand that Millsy's a highly sought-after player, which is fantastic," he said. "But he will enjoy his time at this football club, he loves the fans, he loves being part of it and he understands that he's in this position because of this football club.
"He's contracted for another two years and we see him as a very important part of what we're building here.
"We've got a responsibility to our supporters. We're going to have 20,000-odd members this year, we're going to have 50,000 at our first game. I take that responsibility very seriously."
But Postecoglou did not categorically rule out Milligan departing AAMI Park, although it will take a substantial offer to seal his exit.
He added: "Things change pretty quickly in our game."