A number of clubs have been linked with a move for Dann, but Palace are hoping to win the race for his signature.
Palace boss Tony Pulis is keen to bolster his defensive options before the close of the transfer window and he is a long-term admirer of Dann having tried to sign him during his time in charge of Stoke.
Blackburn are reluctant to lose Dann, but know they cannot stand in the way of a return to the Premier League and his sale could allow Gary Bowyer to strengthen his squad elsewhere.
Dann is thought to be keen on a move back to the Premier League and is to hold talks with Pulis on Friday with the transfer window set to close at 11pm.
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