Argentinian side Arsenal keep made club history in the Copa Libertadores after reaching the quarter-final stage for the very first time on Wednesday.
Twenty minutes after the interval, defender Diego Braghieri headed a Mauricio Sperduti cross from the right and netted the winner.
"This is a historic achievement and totally deserved because the guys have been making such a big effort. We played very intelligently," coach Palermo told Fox Sports.
"We knew we could hurt them in dead balls. All the players' performance was excellent. We must not get satisfied by this. The team has what it takes to climb higher."
Reigning Argentinian champions San Lorenzo booked a berth among the best eight despite a 1-0 loss at Brazil's Gremio.
San Lorenzo, who had won 1-0 at home last week, suffered a lot during the regular period and were close to claim the victory without the shoot-out but Dudu equalised the tie at the 83rd.
The visitors' keeper Sebastian Torrico then turned into the man of the match as he saved two penalties to give San Lorenzo the possibility to progress in their goal to clinch their first Libertadores trophy.
Defender Carlos Valdes told Fox Sports: "Both teams make big effort, but our keeper was superb in the penalties. Gremio were difficult rivals to pass here in Brazil, but we played in great form."
Edgardo Bauza's San Lorenzo will now meet another Brazilian team as Cruzeiro eliminated Paraguayan giants Cerro Porteno with a 2-0 away win in Asuncion.
Dede and Dagoberto netted in the last ten minutes of the duel and gave Cruzeiro a 3-1 aggregate triumph.