Wolves were his only previous club although he was on loan at Championship side Yeovil Town earlier this season.
He is the first signing of the transfer window for Palace, who recently moved out of the relegation positions in the Premier League after winning six of their 12 league games under new manager Tony Pulis.
Palace were also linked with a move for Celtic's Wales international midfielder Joe Ledley, a deal which could be finalised later on Friday.
(Reporting by Josh Reich)
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