The 23-year-old midfielder is now under contract at the Cardiff City Stadium until the end of the 2017-18 campaign, having fallen out of favour at Selhurst Park.
Following his move from Southend in 2010, O'Keefe made 51 appearances for Palace, but is now tasked with helping Cardiff push on from mid-table obscurity.
"I'm really happy to be a Cardiff City player," O'Keefe told the club's official website.
"I enjoyed my four years at Palace but I wanted to come here now for a new challenge. I'm 23 and I felt it was the right time to take the next step in my career.
"We've obviously got a big game coming up against Derby County and I'm feeling ready to get going straight away.
"Hopefully I'll be involved and I'm looking forward to getting out there in a Cardiff City shirt."
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