The 30-year-old, whose contract expired at West Brom in June, has signed a two-year deal with Ian Holloway's side
The winger was released by West Brom at the end of last season after spending four years at the Hawthorns, while he also had a spell on loan at Leeds United last term.
Thomas, 30, revealed that Palace manager Ian Holloway played a significant role in his decision to make the move to the newly promoted club.
"It was a case of me being on a free and weighing up my options," Thomas told the club's official website.
"I wanted to stay at the top level, which is obviously the Premier League.
"I heard of Crystal Palace’s interest from January actually, and once they got promoted Ollie (Holloway) gave me a call when I was away on holiday, we had a good talk for about 45 minutes and after that conversation there wasn’t much doubt in my mind where I wanted to go.
"I saw them throughout the season and watched the play-offs. Like I said, Ollie’s the main factor, but obviously there’s a lot of talent here and him and the chairman are planning on bringing in more.
"It shows what their goals are and I’m definitely looking forward to it."
Palace, who beat Watford in the Championship play-off final in May, have also signed striker Dwight Gayle from Peterborough and Brighton's Stephen Dobbie in the close-season.