Translation:I drew a picture with colored pencils.
The sentence isn't referring to a "colored pencil" as a vague medium. It's referring to actual objects that are called "colored pencils." In English you would refer to a drawing as being drawn in "pencil" and the objects that it was drawn with (such as in the example) as "pencils."
A singular colored pencil is a "colored pencil", which referrs to any non black/grey pencil.
As there's no specific indication that more than one was used, it's a bit harsh to make people guess the right answer. Just like it would be harsh to mark people using plural pencils wrong.
That just doesn't have the sense of being a medium to me -- it sounds like you used only one coloured pencil. To me the closest translation is, "I drew a picture in colour(ed/ing) pencil."
In Japanese differentiating plurals is optional. The main way to get across the concept of plurality in Japanese that I know of is to use 幾つかの～・いくつかの～、or its variants, say, 何本かの～・なんぼんかの～ in this case . . .
Part of me feels like "pencil crayons" should be an acceptable replacement for "colored pencils", even if it's only one place where the term is used... (colored pencils makes me think of pencils that just have different colors/designs on the outside but are generic gray lead) ;~;