The 28-year-old English player joined the Eagles in 2023 for a reported £4 million.
However, he struggled to find regular playing time at Palace and had a disagreement with the team's manager, Oliver Glasner, last summer.
Holding spent the second half of the previous season on loan with Sheffield United, where he may have a chance to return.
There are also rumors that he might join a team in the Major League Soccer (MLS) or Coventry City in the future.