I'll repeat my PJ edit/crits here for convenience's sake:
I really like this character concept. here's an edit:
Right now I think the main problem is noise. With such a small sprite, you've got to sacrifice some detail/texture for readability. Try to focus more on the clusters and less on individual pixels. Design-wise, I felt a more exaggerated trucker hat gave him more character. When I think 'armadillo', the first thing that comes to mind is their shell, so I emphasized that feature in my edit. Also added a tail.
Also, as a slight aside, if you're working on a white background I'd try not to make a habit of it. It can throw off your colors a bit, I find it most convenient to work on a midtone, usually grey.