This verse is often thought to mean animals that were previously off limits to eat are now acceptable to eat. Was God telling Peter that it is now okay to eat animals previously declared an abomination to eat?

Please review the section on Matthew 15:11.

Any misunderstanding is actually cleared up easily because the interpretation is provided by Peter later in the same chapter and after.

“And he said to them, “You yourselves know how unlawful it is for a Jew to associate with or to visit anyone of another nation, but God has shown me that I should not call any person common or unclean.” (Acts 10:28)

“So Peter opened his mouth and said: “Truly I understand that God shows no partiality, but in every nation anyone who fears him and does what is right is acceptable to him.” (Acts 10:34-35)

“While Peter was still saying these things, the Holy Spirit fell on all who heard the word. And the believers from among the circumcised who had come with Peter were amazed, because the gift of the Holy Spirit was poured out even on the Gentiles.” (Acts 10:44-45)

“So when Peter went up to Jerusalem, the circumcision party criticized him, saying, “You went to uncircumcised men and ate with them.” (Acts 11:2-3)

“When they heard these things they fell silent. And they glorified God, saying, “Then to the Gentiles also God has granted repentance that leads to life.” (Acts 11:18)

“And after there had been much debate, Peter stood up and said to them, “Brothers, you know that in the early days God made a choice among you, that by my mouth the Gentiles should hear the word of the gospel and believe.” (Acts 15:7)

The Torah did not prohibit table fellowship with Gentiles but Jewish tradition had led to that practice anyway. The vision was to tell Peter that Jews were to no longer treat Gentiles as unclean and disassociate from them. God did not instruct Peter to eat animals previously declared an abomination.