The 33-year-old joins the Eagles on a free transfer, having being released by Chelsea at the end of last season after spending seven years at the club.
Reports claim that Cahill has penned a two-year deal worth £75,000 a week.
As revealed by Sportsmail last week, both Burnley and West Ham were also interested in signing Cahill but Palace were able to convince him to join them.
Roy Hodgson, who has been desperate to add fresh faces to his squad this summer, wanted Cahill to bring his experience and leadership qualities to Palace’s backline and will be delighted by his capture.
The former England international will hope to make an impact at his new club after only making two Premier League appearances for Chelsea last season.