The French Under-21 striker is Pardew's first signing since he succeeded Neil Warnock at Selhurst Park.
Pardew told the club's official website: "He's a young player with tremendous promise, somebody that I have tracked personally and this club has too so that fitted well."
The 21-year-old Sanogo, who joined the Gunners at the start of last season from Auxerre and featured in their FA Cup final win over Hull in May, said: "When the Arsenal manager spoke with me about Crystal Palace I was very happy because I want to play more games.
"I think Palace are a good team, I watched the game against Tottenham and it was a great performance from the guys. I hope I can help the club have a successful second half of the season."
Pardew added: "We have given him an opportunity, he needs to play more games and I think he's ready for that and he proved that at Arsenal. It's tough to get in their team but he's closer to the starting action with us."
Sanogo has scored just once in 19 competitive appearances for Arsenal, claiming the first goal in the Gunners' 2-0 home Champions League victory over Borussia Dortmund in November.
Arsenal manager Arsene Wenger retains great faith in the striker however, and has sent the former Auxerre man on loan to boost his Premier League experience.
Olivier Giroud and Alexis Sanchez have dominated Arsenal's striking options this term, with Lukas Podolski having now joined Inter Milan.
Palace struggled for goals under Warnock, with the former Sheffield United boss having targeted Swansea striker Bafetimbi Gomis as a potential solution.
Sanogo will now battle it out with Marouane Chamakh, Dwight Gayle and Glenn Murray to start up front for Palace, after Kevin Doyle returned to Wolves at the end of his loan spell.
Pardew has started his Palace reign with two victories, at Dover in the FA Cup and against Tottenham in the Premier League, and is keen to bolster the Eagles' squad for their top-flight survival battle.