In a fairly even and scrappy game, Alan Pardew's Eagles took the lead through French international Yohan Cabaye after he tapped in the winner from a near-perfect Yannick Bolasie cross.
Southampton boss Ronald Koeman made some changes to his side following uninspiring performances against Liverpool in the Capital One Cup and Aston Villa last Saturday, leaving Dusan Tadic and Graziano Pelle on the bench while Maarten Stekelenburg was replaced by Paulo Gazzaniga after sustaining a toe injury.
Argentine 'keeper Gazzaniga produced a more assured performance in the Saints goal than in the past, and kept Southampton within a shout of nicking a point following a string of impressive saves in the second half.
Southampton also had their chances, with Steven Davis' goal-bound header was superbly stopped by the fingertips of Welsh goalkeeper Wayne Hennessey.
In injury time, Hennessey was at it again when he saved Shane Long's tame effort when he was through on goal to secure all three points for Palace. Though, arguably, Long should have done a lot better with his chance.
Southampton have now lost three of their last four Premier League games and continue a worrying drop in form heading into the festive football season.