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The 37-year-old hasn't played since the summer of 2008 after he retired at Dutch club Ajax but it is understood the former Juventus superstar has held talks with Eagles boss George Burley with a view to signing a short-term deal at Selhurst Park.
Davids spent two seasons at Tottenham and is said to be keen on returning to London and Burley has moved quickly to land the holding midfielder.
The Dutchman is said to be currently mulling over the offer and will give the south London club a decision in the next few days.
The capture of Davids would signal a massive coup for Palace, who were on the brink of going bust before local businessmen Martin Long and Steve Parish completed a last-minute takeover in June.
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