I think the question is somewhat different than where to locate and install palettes though that is an important piece of information for some approaches to this question....
Palettes are, in fact, notebooks, but with a different set of notebook option settings than the default notebook that one works in.
So, to edit your Palette you need to make some adjustments to these options to make the palette editable so you can modify it and then save it.
Doing some of this possibly involves some more advanced techniques, depending on how you created the original palette. But if the Palette was created using things like CreateWindow[PaletteNotebook[...]] or CreatePalette[...] then the palette differs from a conventional notebook mostly by it's StyleSheet. If this is so, then you can work with it as follows.
First we have to assume that you know the NotebookObject of your original palette assuming that it is open. If so, then its NotebookObject is one of the items listed in
Notebooks[]
Say that that NotebookObject is called nb.
Then you can modify its StyleSheet using
SetOptions[nb, StyleDefinitions -> "Default.nb"]
Now you can work in the palette as you would in any conventional notebook since it is indeed now a conventional notebook.
When you are done, and have adjusted its size, coloring cells margins, and so on to you liking, you now just execute
SetOptions[nb, StyleDefinitions -> "Palette.nb"]
You might also want to execute
NotebookSave[nb]
