The 65-year-old has signed a two-year deal after being chosen ahead of ex-West brom manager Steve Clarke. This appointment will make it his third spell after managing the club in 2007 and 2010.
The London club is also interested in retaining the services of their caretaker manager Keith Millen.
A string of coaches have been linked with this managerial job since the surprise departure of Tony Pulis, including Malky Mackay, Tim Sherwood and Steve Clarke but the management opted for a familiar face.
“Crystal Palace are delighted to announce that Neil Warnock has been appointed as the club’s new first team manager with immediate effect,” read a statement on the club’s official website.
The club is currently in the relegation zone after suffering two in their first two matches and Warnock is expected to oversee their next league tie against Newcastle this weekend.
Warnock has not had the best of experiences in the Premier League, he endured relegation with Sheffield United on the final day of the season in 2007 and was sacked as manager of QPR in January 2012, with the club sitting in the relegation zone.
He took Crystal Palace to the championship play- offs in his previous spell but left when the club went into administration.
The club has assured Warnock that funds would be provided for him to make the changes he needs but with 5 days to go to deadline day, it would be tough to get the right players in on time.