Francis, who was manager at St. Andrew's from June 1996 until October 2001, took over the job at Selhurst Park after Blues boss Steve Bruce resigned.
"I am totally committed to playing in the Premier League and I will ensure the new manager can achieve this aspiration," Palace chairman Simon Jordan told the club's official website:
"I would like to thank Trevor for all his hard work and I would like to wish him the very best for the future."