The 27-year-old former Bastia player has been convinced by new chairman Simon Jordan that the future of the South London club is secure.
"I am very happy here at Palace," said Fullarton. "We are very optimistic for the new season.
"We have a new chairman, Simon Jordan, who has trebled our win bonuses and stated his case for success.
"I was flattered to have two club from abroad come in for me even though I am happy to stay at Palace now that we are out of administration and can put a turbulent year behind us."
Fullarton joins Dean Austin to have agreed a new deal, the 30-year-old former Spurs star was, like Fullarton, convinced by new chairman Jordan.
Austin said: "I was delighted that as soon as the new chairman took over I was offered a new contract."
