The French-born Mali international began his career with Lens and then joined Reading in 2008, helping them to claim the Championship title in 2011/12.
He also played for the Royals during their pair of recent appearances in the Premier League and now gets another crack at the top flight, having become Palace manager Ian Holloway's 11th signing of the summer.
"It's a big move for me," Kebe told the Crystal Palace website.
"I didn't know if I was going to be able to move in this transfer window but getting back to the Premier League was my main target. I'm very excited about it.
"I talked to the manager and you can see how excited he is and I'm ready for the challenge.
"It's a big opportunity for the club. We know it's not going to be easy to stay in this league as there's a lot of good clubs but anything is possible, so we'll try our best.
"I was in the same situation with Reading and it's never easy to move from the Championship to the Premier League as it's a big step, but there are quality players here and we have a strong team to do something with."
Palace are up to 14th in the Premier League table after a morale-boosting 3-1 win over Sunderland on Saturday.