The Ghana international joined the Eagles on a four-and-a-half-year deal for an undisclosed fee on Friday, after struggling for playing time at King Power Stadium.
"Jeffrey brings a lot of energy, experience for a young man," Allardyce said.
"He was part of a Premier League-winning run last year. He can play in a couple of positions.
"We lack a bit of pace in the side. Jeffrey should be a bit of a dynamic edge.
"He was actually quite cheap compared to the prices we've been quoted for other players.
"He was desperate to come, desperate to leave Leicester even though they were champions. He wants to play more."
Schlupp made his first appearance for Palace in a 3-0 league reversal to West Ham United on Saturday.