The 23-year-old Scotland international, who moved to Ewood Park from Dundee United in August 2011, scored two goals in 20 Premier League appearances last season.
"This is a fantastic bit of business for this club on deadline day," said Eagles boss Dougie Freedman. "I have been tracking his progress for some time and missed out on getting him last season, but it is great that he is now part of our squad.
"His quality will help strengthen our squad and I look forward to working with him now we have been able to get him into the club through until the new year."
Goodwillie will be available for selection in today's Championship match against Sheffield Wednesday at Selhurst Park.