The former Arsenal and Charlton man left West Brom this summer as a free agent following four seasons at The Hawthorns.
Thomas, who has now linked up with his new team-mates at their Portuguese training camp, told the Palace website: "I wanted to stay at the top level, which is obviously the Premier League.
"I heard of Crystal Palace's interest from January actually, and once they got promoted Ollie (Ian Holloway) gave me a call when I was away on holiday.
"We had a good talk for about 45 minutes and after that conversation there wasn't much doubt in my mind where I wanted to go.
"Ollie's the main factor, but obviously there's a lot of talent here and him and the chairman are planning on bringing in more. It shows what their goals are and I'm definitely looking forward to it.
"I hope I can bring a lot to the team. I've got experience of the Premier League and the gaffer's going to give me the freedom to play how I want to play - my attacking game."
Thomas spent a month on loan at Leeds United last season, lining up against Palace on his debut in November and earning the man-of-the-match award as Leeds won 2-1.