Warnock has been out of work since quitting Sheffield United at the end of last season and he has been keen to get back into management.
The 58-year-old will take charge of Palace for the first time against Blackpool on October 20 - and revealed he will be bringing Mick Jones and Keith Curle to the club as part of his coaching staff.
Palace owner Simon Jordan added on Sky Sports News: "Why Neil Warnock? I have been a big admirer of Neil's for years. He represents everything I want in a football manager - he is a winner, which is an expression which is much overused, and he has a desire to be successful.
"He gets his players going, he is a manager, he leads and that is what I think this football clubs needs."
Warnock, who has signed up until summer 2010, admitted his rescue job at Selhurst Park will be his last managerial role.
He said: "I didn't feel it was right to jump straight into the first job to be honest. It was nice to step back a little bit.
"The biggest thing about coming here was Simon and I have spoken (to him) nearly every week now for a number of years, and it's difficult when you go and work for somebody that is a friend as well.
"You tend to have one or two little disagreements with your chairman and my wife, in particular, did not want us to fall out over football, but Simon and I talked this week about what he felt about the relationship and how we could make it work.
"Simon Jordan and Neil Warnock - you guys [the media] have got some good coverage over the years and it's an exciting prospect that you have two ambitious people who want to do something.
"It's my last job, without a shadow of a doubt. There won't be another job for me. I just feel I have something to offer Simon and his club.
"We will still be friends outside of football but it will be a working relationship which we both feel will work."