The 21-year-old forward, who has played six times for Arsenal this season and scored his first competitive goal in their 2-0 Champions League win over Borussia Dortmund in November, becomes Alan Pardew's first signing since he became Palace manager earlier this month.
Sanogo will link up with former Arsenal forward Marouane Chamakh in attack as Palace, who climbed to 15th in the table after beating Tottenham Hotspur 2-1 on Saturday, continue their fight against the drop.
Pardew told the Palace website (www.cpfc.co.uk): "He's a young player with tremendous promise, somebody that I have tracked personally and this club has too so that fitted well."
Sanogo has been at the Emirates Stadium since the start of last season, joining from Auxerre where he was developed as a youth.
He came on as a substitute in last season's FA Cup final win over Hull City at Wembley and played in the first half of Arsenal's win over Manchester City back at Wembley in the Community Shield in August.
(Reporting by Mike Collett, editing by Julien Pretot)
