He said at the time that his hand had been forced by the busy league calendar.
But the Premier League is understood to have considered Blackpool's as an extreme case and took Holloway's team selection for the FA Cup third-round defeat at Southampton into consideration.
Holloway, who confirmed that the club would appeal, said: "They don't understand what it is like to do my job, with the lowest budget, and tell you your players are not good enough.
"I honestly think it is rubbish. I don't know which team to pick now.
"All I can do is keep trying to put a team out to win a match and that is what I have done every game this season apart from Southampton [in the FA Cup] when I didn't take some of my better players because I thought they were exhausted.
"I had every right to do that but I can't do it in a league game."
Holloway, who took charge at Blackpool in 2009, had threatened to resign if he was punished for fielding so many changes for the match against Aston Villa.
He went through with his threat once news of the fine came through, but said his offer of resignation was turned down by chairman Karl Oyston.
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