The authority said two people of “Native American origin” had raised concerns about a panel which shows six men in headdresses and a totem pole.
The panel dates from the 1960s and is a regular feature of the annual display.
The council said it would “take on board” the comments and review which lights were “appropriate” for 2022.
A spokeswoman for the authority said the panel, which is part of the Wild West section on Queen’s Promenade, was “designed many years ago and intended to be a celebration of different cultures”.
She said council officers had been “in constructive discussion with two people of Native American origin, who raised concerns about the tableau”.
“We have explained the background to the historic elements of the Illuminations display,” she said.
“[We] assured them these were designed and created many years ago and intended to be a celebration of different cultures.”
She added that both complainants had “accepted that assurance”.
Negative or inappropriate depictions of Native Americans have been increasingly challenged in recent years.
The council spokeswoman said the authority had “agreed to explore options for a new tableau that celebrates Native American culture with input from the network based in the UK”.
She said the Illuminations was “one of the UK’s most enduring family attractions”, it would never contain “anything intended to cause offence” and the council will review the lights once the current season ends.
This season’s illuminations will run until January after they were extended by two months in an effort to boost the town’s tourism industry, which has been hit by the Covid-19 pandemic.