The 30-year-old had been without a club for a short period of time following his release by West Bromwich Albion at the start of the month.
Speaking about his switch, Thomas admitted that manager Ian Holloway played a major role in convincing him that Palace was the right club for him.
"It was a case of me being on a free and weighing up my options. I wanted to stay at the top level, which is obviously the Premier League," the winger told the club's official website.
"I heard of Crystal Palace's interest from January actually, and once they got promoted Ollie gave me a call when I was away on holiday. We had a good talk for about 45 minutes and after that conversation there wasn't much doubt in my mind where I wanted to go.
"I saw them throughout the season and watched the playoffs. Like I said, Ollie's the main factor, but obviously there's a lot of talent here and him and the chairman are planning on bringing in more. It shows what their goals are and I'm definitely looking forward to it."
Thomas has signed a two-year contract at Selhurst Park.