Dikgacoi was a member of South Africa's 2010 World Cup squad but he has struggled for playing time since signing for Fulham in August 2009.
The 26-year-old was delighted to move to Palace, despite the south London team's lowly position in Championship, as more regular first-team action should boost his chances of remaining in the South Africa team.
He will be available for Palace's crucial clash against fellow strugglers Sheffield United at Selhurst Park on Saturday.
"I'm very pleased with the move. It's a chance to get some game time and that will help my chances of playing for my national team," Dikgacoi told Palace's website.
"I know (the Championship) is quite an intense league so it should be an interesting week and I'm looking forward to the game on Saturday."
Palace manager Dougie Freedman is confident Dikgacoi will improve his side's survival chances and he added: "He's an experienced international who has played in England for a while now, so he will have adapted to that.
"He's an athletic player who can sit in the midfield and add experience for us."