Eagles manager Ian Holloway worked with the 25-year-old midfielder at Blackpool and the deal, which is subject to Premier League and Football Association approval, includes an option for a further year.
"I'm very excited. I had a very good year in the Premier League with the gaffer, so I'm excited to start the new season," Grandin told Palace Player.
Former France Under-21 international Grandin left Caen for Marseille in 2008 but, having helped the French giants reach the Champions League, he fell out of favour.
A spell with Bulgaria's CSKA Sofia followed until Holloway took him to Blackpool in 2010, and he stayed with the Tangerines until his release earlier this year.
A 45-minute spell in Palace's pre-season victory over Dagenham and Redbridge convinced Holloway to sign him for a second time.
"We had a very good run at Blackpool. The team played well but we were unlucky at the end because we went down," Grandin said.
"We had a very, very good year though, we enjoyed it and I hope it will be the same with Crystal Palace.
"The Premier League is very nice because every game is a new challenge. It's like a cup final in every game.
"You play against great players, great teams, so you have to be focused on your football and everyone has to give their best because it's a difficult league.
"I believe it's the best league in the world because all the teams are very good.
"In the French league or in the Spanish league you have six strong teams, but in the Premier League all the teams are very strong.
"Everybody can beat everybody, so it's hard to say who will stay up, who will go down. If we work together and the team is confident, anything is possible."
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