The 50-year-old indicated that allowing fourth officials access to video replays, in order to assist referees, would help end simulation and be "so simple it is ridiculous"
The 50-year-old's comments come after Palace's 2-0 defeat at Manchester United last weekend, a game that saw Ashley Young booked for simulation by referee Jon Moss in the first half, which also sparked fury from Holloway's counterpart David Moyes.
And with the issue of diving as prominent as ever, the Eagles manager is keen for technology to be implemented to assist officials.
"I have to be very careful – I'm only suggesting, I'm not saying anybody's wrong," Holloway is quoted as saying in The Daily Express.
"I have always said the biggest part of it is to put a fourth official in the stands with a monitor, in contact with a referee. I have said it for four or five years but no one has bothered to listen.
"They won't be needed all the time. It would just be like 'Ref, that’s definitely outside the box'.
"Joe Public won't respect a referee if he is shown over and over again, by a TV camera, that he is wrong. It is so simple it is ridiculous. You don't need cameras on a park game on a Sunday – it's not worth £120million.
"The fourth official is shouted at by people like me, but he should be in the stands with a monitor. Someone has to fight for it because as managers we all get wrong decisions against us – some more than others."