The 22-year-old has attracted interest from a number of Premier League sides during the transfer window, including Swansea City, Hull City and Sunderland.
Swansea have confirmed that they have since ended their pursuit of the player.
According to The Mirror, Palace chairman Steve Parish has paid a £1m loan fee to secure Ince's services for the remainder of the campaign.
Palace are said to have sanctioned the deal after losing out to Cardiff City for the signing of Wilfried Zaha from Manchester United.
Ince's contract with Blackpool will expire in the summer.