The South Africa international moves to south Wales as a free agent, and will officially become a Cardiff player when his contract at Selhurst Park expires on June 30.
Dikgacoi made 114 appearances for Palace after joining from Fulham in 2011, and the midfielder says Ole Gunnar Solksjaer played a major role in his decision to finalise the switch.
"The manager was persistent in wanting to bring me here, which always means a lot to a player," he told the club's official Twitter account.
"Growing up I was a big fan of the way he played and I can't wait to get started with my new team-mates in training.
"I'm really looking forward to my first game in front of the Cardiff City fans.
"Like Crystal Palace fans, Cardiff fans are extremely passionate and love football. I'll be sure to give them 100 per cent effort."
Get the best features, fun and footballing frolics straight to your inbox every week.
Thank you for signing up to Four Four Two. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.