The 40-year-old joins Palace following an impressive two-year spell in charge of Scottish Women's Premier League side Rangers and a stint as assistant manager at Birmingham City.
During her time in Glasgow, Potter won a cup double in both of her seasons in charge, delivering four trophies in total.
Prior to her managerial career, Potter won 35 caps playing for England over 13 years. She scored three goals on the international stage and was part of the Lionesses squad which finished third at the 2015 FIFA Women’s World Cup in Canada.
Featuring predominantly as a creative left-sided midfielder, Potter represented the likes of Birmingham, where she won the Women’s FA Cup; Arsenal; Charlton Athletic; Everton; and Reading, before retiring from playing in 2021.
Chairman Steve Parish said: “I’m delighted to welcome Jo to Crystal Palace. She has an excellent record during her time in management so far, building on her vast experience as a player at the highest level.
“We firmly believe she is the right manager to take our women's team forward at this stage, as they build towards the forthcoming season in the Barclays WSL2.”
Jo Potter commented: “I’m extremely honoured to join Crystal Palace and looking forward to coming in and hitting the ground running.
“I know there’s huge ambition running throughout the club. I had a really good conversation with Steve Parish and could see how important the women’s team are to him and his aspirations for this club.
“It’s a massive place to be right now. We really want to make sure that we've got the network and the environment right, so that we’re able to make this season a successful one.
“My message to the fans is that we are going to fight – we are going to fight with you and for you. We want to see you bring the noise and support the team.”