Butland stayed with Stoke after relegation from the Premier League in 2018 and his contract was set to expire at the end of this season.
The 27-year-old was given his England debut by Palace boss Roy Hodgson in 2012 and has gone on to win nine caps.
Meanwhile, keeper Angus Gunn has joined the Potters from Southampton on a season-long loan.
Gunn cost the Saints £13.5m when he joined them from Manchester City in 2018.
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