The former England C team defender last played for Derby on 22 January in a 1-0 home defeat against Nottingham Forest.
Moxey said he was confident Palace, who are currently third from bottom in the Championship, could "get out of trouble".
"I spoke to Dougie [Freedman, Palace manager] and the new owners on Saturday and they convinced me,"
Moxey told the club's website.
"With the type of players he's bringing in, we've got a great chance of getting out of trouble and I'm looking forward to this new challenge."
Is Moxey a good signing for Palace?
Moxey, who will wear the number 29 shirt, will not be available for Palace's match with Watford on Tuesday because he is suspended following his sending-off against Forest.
Source: BBC Sport