The defender was dismissed during Tuesday's 3-0 win over Annan in the Irn-Bru Third Division after referee Paul Robertson ruled that Wallace had fouled Jack Steele in the penalty area and produced a straight red card.
Goalkeeper Neil Alexander saved the subsequent penalty as the Light Blues went on to secure a comfortable victory at Ibrox.
A story on the club's website confirmed: "Having reviewed footage of the incident at Murray Park, manager Ally McCoist feels the decision to remove the 25-year-old from the match early was harsh.
"And after careful consideration the Light Blues have exercised their right to appeal against the ruling.
"It is understood the consequent hearing will not take place at Hampden Park until next Thursday due to the festive period.
"That being the case, Wallace would therefore be free to play against Elgin City this weekend then Clyde on Boxing Day."
- Sports & Recreation
- Paul Robertson
- Neil Alexander
- Jack Steele