"It doesn't help us a great deal," Hodgson told a news conference ahead of Saturday's game against 15-placed Stoke City. "It would've been nicer if the penalty had not been given and he not having to serve a two-match suspension.
"That would've been the ideal scenario but the penalty was given and we did – I think – lose points as a result of it and the FA have seen fit to punish him because obviously they don't want it to happen to other teams."
The former England boss said it could be tough to determine a player's intentions even with the help of video replays and expressed sympathy for referees because they have to "pick these things up in the heat of the moment".
"You have to be careful of diving as there are situations where the dive is less pronounced than others," he said.
"There are ones when players lose their balance but it is not a penalty and the player has not dived. The sympathy has to be with the referee."
Under a new law introduced in May, incidents involving players who deceive a match official can be reviewed by a three-man panel.
The FA will only impose a ban if the panel members - an ex-match official, an ex-manager and an ex-player - independently arrive at a unanimous decision.
Palace picked up the first of their five points only after Hodgson replaced Frank de Boer as manager in September, and the 70-year-old said the team faced an uphill battle for survival because of their poor start to the campaign.
"If we had 12 points from 12 games we wouldn't be quite as disappointed," Hodgson added.
"We're fighting a lost cause in the fact that we can't get back what happened in those first seven games with no points and no goals scored. We've always been aware it will take more than just a wave of the magic wand to put that right."
(This version of the story has been refiled to clarify Hodgson would have preferred points to seeing opponent Niasse band for diving)
(Reporting by Shrivathsa Sridhar in Bengaluru Editing by Jeremy Gaunt)
