Warnock, 65, spent almost three years in charge of the Eagles after joining in 2007 but left in January 2010 after the club slipped into administration and suffered a 10-point deduction.
The Yorkshireman returned to succeed Tony Pulis after a protracted hunt for a new boss saw Malky Mackay fall out of the running following allegations of derogatory text messages, while several other candidates, including Tim Sherwood and Steve Clarke, failed to secure the job.
“It’s all come about in quite a whirlwind but it’s a great place here - I’ve always enjoyed myself at Palace and I’m looking forward to the challenge," Warnock told Sky Sports News HQ.
“I owe something to the club and I thought it would be great to be able to come back and repay that.
"I was at a bad spell at the time I came to Palace last time and the fans were fantastic with me. Some fans didn’t like me but I like to think they remember me.
“In a difficult period with the administrator, we sorted that out and we got the club in a steady position. It’s nice to be able to come back and take that on - I just think it's a great club.”
Gerry Francis, part of Tony Pulis' coaching staff, has left the club.
He said: "I have really enjoyed my time at Crystal Palace and I am disappointed to be leaving.
"The players have been a pleasure to work with and the fans have been brilliant, but although Neil has asked me to stay on, I feel that with new management coming in to the club it is the right time for me to leave.
"I would like to wish Neil, Keith Millen, the chairman and directors, players, staff and Crystal Palace fans every success this season and to stay in the Premier League once again."