The Yorkshire side will host Premiership side Aston Villa in the last 16 of the competition, but Penney admits his players are distracted.
And after a 2-0 home defeat at the hands of Tranmere on Saturday, Penney would much rather he could 'focus on the League'.
He said: "We huffed and puffed and never got into top gear. It's nice to do well in the cup, but right now I would trade in all those wins for some more League points.
"We looked sluggish and there wasn't the usual zip or sparkle that you would normally associate with our play.
"It was a bad mistake and a lack of communication that led to them scoring their first goal and cost us the game. But we have no excuses and no complaints about the result."