The Turkish forward will spend the rest of the campaign with the Eagles in a bid to gain more regular football ahead of this summer’s European Championships.
Tosun, 28, was signed from Besiktas for £27 million in January 2018, but has struggled for goals and game time lately, netting just 11 times in 52 Blues outings.
He has only one Everton goal to his name this term, and has not featured since the goalless home draw with Arsenal on December 21, when he walked straight down the tunnel after being substituted.
Indeed, it had appeared Richarlison, Dominic Calvert-Lewin and Moise Kean were all ahead in Carlo Ancelotti’s forward pecking order of Tosun, who was left out of the matchday squad for Sunday’s FA Cup defeat at Liverpool.
Tosun has been linked with a move to Palace in previous transfer windows, including last summer, when he was apparently offered as a makeweight in Everton’s attempts to lure Wilfried Zaha to Goodison Park.
He was also recently rumoured to have attracted interest from Premier League strugglers Aston Villa, as well as a return to Besiktas, but was reportedly keen to remain in England.
He will be ineligible to face Everton for Palace when Roy Hodgson’s men visit Goodison in the Premier League on Saturday, February 8.