The 38-year-old replaces Owen Coyle after the Scot was sacked 10 games into the Championship season earlier this month with the club lying in 18th place following a poor start
Crystal Palace announced Freedman's departure on Tuesday, while the 38-year-old replaces Owen Coyle who was sacked earlier this month after guiding the club to 18th in the Championship after 10 games.
“I am delighted to join Bolton," Freedman told Bolton's official website.
“The club is geared up to getting back into the Premier League. There is an impressive setup and structure in place, and a first team squad of undoubted quality. I am excited about the challenge ahead of us.”
Freedman was in charge of Crystal Palace for 21 months, with the club claiming a 17th-place finish in the Championship last season.
Bolton's chairman Phil Gartside said: "Dougie is young and ambitious. When we met his enthusiasm and knowledge of the game was evident.
"He has a real drive and passion, and knows what we want to achieve and how we want to go about it. I am looking forward to working with Dougie to secure that."