The 33-year-old, who previously played at Selhurst Park from 2002 to 2006, returned to the club on a short-term deal in September in an arrangement that also saw him take on some coaching responsibilities.
Johnson has made just one appearance from the bench this season and does not feature in new Palace boss Alan Pardew's plans.
Despite being deemed surplus to requirements, Johnson expressed his gratitude to the club.
"It was great to be back at Palace, if only for a short time, and I wish everyone at the club and those great supporters every success for the rest of the season," he told the club's website.
Palace host Tottenham in the Premier League on Saturday.
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