Butland's contract with the Eagles expires this summer and he is a free agent.
The 30-year-old spent the second half of this season on loan at Manchester United, but made no appearance at Old Trafford.
Butland has nine caps for the England national team and has played 87 times in the Premier League for Stoke City and Crystal Palace.
“I’m over the moon,” Butland told Rangers’ official website.
“The club speaks for itself. No matter where you are in football, you know about Rangers Football Club. This is a huge opportunity for me, and I’m delighted to be here.
“I feel great and motivated at the age that I am, and I feel excited at what the future holds. Doing that at a club that is equally as passionate about winning and being at the top was huge for me.
“It’s an important summer for the club and we need to get off to a good start. Getting the work done early is hugely important, so that we’re settled and raring to go when we come back in.”
Rangers manager Michael Beale added: “I am delighted that we have recruited Jack. It was clear from our first meeting that we have a strong alignment on football and his development moving forward.
“At 30, he is coming into the prime years of his career having already amassed huge experience with 300 appearances in senior football, including almost 90 in the Premier League.
“In addition, he has played for England at every level, including nine caps for the senior team and five for the Great Britain Olympic team.
“I feel that we have recruited an excellent goalkeeper and, importantly, a top person. We are delighted to have Jack and his young family arriving in Glasgow and look forward to seeing him excel in his time at Rangers.”
