First of all make a backup.
1 - Unzip sfiii3n.zip or sfiii3.zip
2 - Open file 51 with PalMod
3 - Select Dudley in the drop down menu.
4 - Below it you shall see another drop down menu that goes like LP, MP, HP, etc. I named each one accordingly in my zip so you know which ones goe where but you’re absolutely free to load any palette to any button.
5 - Select which palette you want to change, then click Tools > Load ACT Palette.
6 - Double click the one you want.
7 - Do the same for the Portrait; click the bottom drop-down menu to select it, then click again Tools > Load ACT Palette.
8 - Finally, click Update, and then File > Patch changes.
After that, repack all the files into a new zip and use this new one as a rom in your emulator of choice; you’ll get an error message but just click OK and it will be loaded without problems. Make sure that your back up is not in the same folder, otherwise you risk overwriting it.