The 27-year-old has signed a deal with the club until 2027, subject to international clearance.
Born in New York, Cosme represented Duke University at college level between 2017 and 2021, where she helped the Blue Devils win the Atlantic Coast Conference in her first year.
Cosme was then selected in the first round of the 2022 NWSL Draft by Orlando Pride, where she made six appearances in all competitions, before swapping Florida for Garðabær, signing for UMF Stjarnan in Iceland in April 2024.
After 12 appearances and three goals for the club, Cosme signed for French team FC Nantes in July 2024. She spent two seasons in the Première Ligue, helping Les Canaris to a seventh-place finish in 2024/25, and then a fourth-place finish in the 2025/26 season.
After playing for the United States up to Under-15 level, Cosme made her senior international debut for Puerto Rico in May 2025.
Manager Jo Potter said: “It's great to have Caitlin join us at Palace for our return to the top-flight.
"She will bring a lot of experience and quality to our backline in the WSL."
Upon joining, Cosme said: "Everyone has been so welcoming so far and I'm excited to just immerse myself in this club and in this community."
You could potentially see her in action on Sunday at Selhurst Park, as Palace Women take on Spurs in SE25.
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