The South Africa international will officially move to the Championship side on a free transfer when his current deal with Palace expires at the end of this month.
The 29-year-old was out of contract at Selhurst Park and turned down a new offer before dropping down a division to sign for Cardiff on a three-year deal.
Dikgacoi becomes Cardiff manager Ole Gunnar Solskjaer’s fifth signing of the summer following the arrival of Adam Le Fondre, Javi Guerra, Guido Burgstaller and Federico Macheda.
The midfielder joined Palace on loan from Fulham in February 2011 and the deal was made permanent five months later for a £600,000 fee.
Dikgacoi, who started his career with Cardiff Spurs in South Africa, scored eight goals in 114 appearances during his time at Palace.