Pulis dropped out of the running after it was reported over the weekend that he was not interested in taking charge with the club rooted to the bottom of the Premier League table.
However, the former Stoke boss has since toppled Dan Petrescu as the market leader to succeed Ian Holloway after declaring he would not have a problem managing outside the top flight.
Petrescu was as low as 1/16 on Monday to take charge of the Eagles but the Dinamo Moscow coach has since drifted out in the betting amid reports that he has rejected the club's terms.
Pulis has been out of work since leaving the Potters in May after a seven-year stint which saw him win promotion to the Premier League and lead the club to their first FA Cup final in 2011.
The 55-year-old, who is now odds-on for the Palace post, said: "I do enjoy picking clubs that are maybe not as successful as others and trying to make something of them.
"I've managed in every league and enjoyed it, so it doesn't have to be in the Premier League."
"It just has to be the right job and got to be a challenge."