City boss Pep Guardiola confirmed he has the defender available ahead of Saturday's fourth-round tie at Selhurst Park and will make a final decision on his involvement ahead of kick-off.
Kompany was an unused substitute in last week's Premier League draw against Tottenham and has not played for 10 weeks, his last appearance coming in City's previous meeting against Palace in November.
New signing Gabriel Jesus is also in contention to play, while Guardiola confirmed Caballero will start in place of the under-fire Bravo as he continues to be preferred for cup competitions.
"We will see [if he plays] - but he is fit and ready," Guardiola said of Kompany at his pre-match media conference.
"The last game he was on the bench, which means he is ready.
"We are going to play Willy Caballero. [Jesus] is fit and he has already had three weeks with us. We will see on Saturday [if he will play]."
Guardiola stressed Palace represent a difficult test, despite them sitting in the league's bottom three.
He said: "Of course we want to go through and win that competition. Saturday is a final for us.
"Every game is complicated, so it will be tough because of the stadium, Palace's position and because it is away."