The 33 year old has been with Fulham for the last six and a half years, but left at the end of his contract after not being given assurances about the future direction of the club.
Hull City had also been linked with a move for the towering centre-back as Steve Bruce looked to add experience to play alongside Curtis Davies and new signing Harry Maguire.
However, Palace are winning the race to secure his services, with Eagles manager Tony Pulis planning to partner him with Scott Dann.
During his time at Craven Cottage, Hangeland racked up two hundred and sixty-seven appearances, scoring twelve goals , and was part of the squad that got to the 2010 Europa League.
Palace begin the new season with a trip to FA Cup winners Arsenal, and can be backed at 8/1 for the win.