Lee Hendrie is poised to join Palace on loan from Premiership Aston Villa.
The former England midfielder has found himself down the pecking order since the arrival of Martin O'Neill at Villa Park, and is currently recovering from a calf injury.
The 29-year-old admitted last week that he would like to move elsewhere temporarily to get more first team football, and O'Neill has confirmed he would not stand in Hendrie's way.
"Crystal Palace have approached us about Lee," O'Neill said.
"They want him for a couple of months, though the good news is we could recall him after the first month.
"So that's something that could happen. First of all, he's recovering from an injury and it's also his testimonial year, so those are considerations.
"But, if there are a couple of players in front of him who have done okay and the chance to go out on loan comes up, I won't stand in his way.
"I'm always of a mind to do that if it suits everyone."