personally i think the breton would be extremely useful because of their magic resistance
I covered the race choice earlier (that is, that Nord > Breton for this build), but perhaps my tired writing was unclear. I hope I can clarify.
Bretons generally have two advantages: first, Magic Resistance. That constant 25% is absurd, and with just the Lord stone, it can be raised to a massive 50%, on top of the extra 50 points of armor rating that just serves to make them beefier. There's also Dragonskin, which absorbs 50% of hostile magic. Powerful stuff. [To clarify, Magic Absorption is a
hit-or-miss effect. That means that with 50% Magic Absorption, you have a
50% chance to absorb 100% of a magical effect and gain its base cost in magicka, restoring your magicka]
As odd as it may sound, however, Nords far outclass them in this Paladin build.
For one thing, Nords have 50% Frost Resistance. That may not seem like much by comparison, but it has its advantages that aren't readily apparent. For one, it's better against frost damage than 25% resistance to everything, and it also means never having to enchant equipment with Frost Resistance--not only is 50% enough, but you'll reach the cap when you get Elemental Protection, a Block perk that confers 50% resistance to all elements when blocking with a shield (the cap is 85%, not 100%).
When it comes to total magic resistance--either by means of Magic Resistance or stronger (but separate) elemental resistance--Enchanting suits our needs. It's very possible for anyone, even non-Bretons who don't invest in Alteration, to reach the resistance cap or get reasonably close.
Exchaning Magic Resistance for stronger Frost Resistance gives us multiple options for Enchanting. For instance, if we have a shield of at least 35% resistance to fire and shock, we have all the magic resistance we'll ever need: 85% in all three (combined with perks and racial abilities). And although Magic Resistance stacks with Elemental Resistance, they don't stack quantitatively. That is, they are separate values, so 50% Magic Resistance and 50% Fire Resistance don't add up for 100% or even 85% Fire Resistance. So, if we have a shield of at least 35% Fire Resistance and, say, just 10% Magic Resistance plus the Lord stone, we'll have, when blocking, Fire and Frost Resistance that's
more than 85% and a more-than-reasonable amount of Shock Resistance.
Then there are the racial powers. While Dragonskin is nice and all, it's very counter-intuitive for this build. In order for Dragonskin to work, it
requires that we get hit by enemy magic, and even then, without the Atronach stone, we'll still take damage from enemy magic half the time. Furthermore, all it does is absord magic. Since the only magic school we'll be using in this build is Restoration, the only use to Magic Absorption is regaining magic for our Restoration spells...you know, the ones that will heal the wounds we sustain from all the magic we didn't absorb

Nords, on the other hand, have Battlecry. A massive-area Fear effect allows us to either flank difficult enemies or avoid battles entirely, both of which are wholly more defensive than Dragonskin for this build. While I know that Bretons have their incredible advantages when it comes to magical defenses, they're better off as defensive
mages, using other magic schools to augment their abilities and react to enemy mages in kind when hostile magic is absorbed. While Paladins are great at defending against magic, remember that they're still warriors--Nords excel at being warriors, while Bretons are more suited to be mages.
And finally, while not a huge influence, Nords have starting bonuses that are favorable to this build, while Bretons only have a +5 in Restoration.