A game low on quality was settled by a late header from the substitute which sends the Magpies up to sixth in the Premier League table.
Palace were the better team in the second half but found it difficult to create chances without the focal point of a recognised striker.
Former Newcastle midfielder Yohan Cabaye was fortunate not to see red for a reckless 28th-minute lunge on DeAndre Yedlin, which led to a melee in which Jamaal Lascelles and Patrick van Aanholt were also booked.
There were more yellow cards than shots in the first half, with Christian Atsu coming the closest to breaking the deadlock when he charged into the box and struck into the side-netting in a rare moment of adventure.
Wilfried Zaha, fresh off his goalscoring return from injury, was again used as a makeshift striker by Roy Hodgson, but his unfamiliarity with this position was shown when his back-post header lacked conviction and went wide.
Palace grabbed control of the game at the start of the second period and nearly took the lead on 66 minutes when Andros Townsend bent a shot a few yards over the crossbar.
The Magpies finally tested 38-year-old Julian Speroni in the Palace goal after the 72-minute mark with long-range shots from Mohamed Diame and Jonjo Shelvey, but still the quality was lacking to unlock Palace's defence.
Hodgson showed that he was content to settle for a point when he took off Zaha 14 minutes from time, although his replacement Ruben Loftus-Cheek nearly teed up Van Aanholt for a late goal when his cross-cum-shot was just out of reach of the full-back.
As it turned out, it was a Newcastle substitute who had the deciding say as Merino powerfully jumped above two Palace markers and made the most of a deflection off James McArthur to head Matt Ritchie's corner past Speroni.
While Newcastle are flying high, Palace remain rooted to the foot of the table, unable to build on their shock victory over Chelsea and now without an away point or goal since April.