Since their return to the Premier League in 2013, Palace have only had a few managers remain at the club for no longer than a couple of years, but Hodgson steps away from his boyhood club with four years under his belt.
However, this has felt inevitable for a while, and Hodgson calling time on his Palace career was always going to come shortly as rumours circulated early.
Palace are approaching a busy summer period in which they will not only be seeking a new manager but rebuilding a squad that needs improvement too.
VAVEL Crystal Palace takes a look at the possible candidates for the job and weighs them up as a decision from the Crystal Palace board beckons.
According to Football Insider, Lampard (as pictured) has pulled out of the running for the Palace job shortly after emerging as the favourite to take over at Selhurst Park.
Lampard considers the Palace role as a "huge rebuilding job" and fears a relegation battle with half of the squad needing new contracts for next season.
However, Lampard's track record does not give you the full confidence that he would be the right man nonetheless. During his 18 months at Chelsea, before he was sacked due to a poor run of form, he won 28 of 57 league games under his reign, obtaining a win percentage of 49%.
Positives would include a top-four finish and an FA Cup final in his first season. However there is an element of risk with the surplus of youth that was brought in and the downside to the lack of progress he made with the Blues and his first managerial job with Derby County.
With the Rams, Lampard won 24 of his 57 games and squeezed into the Championship playoffs by one point. But that was an underachievement considering the investment in Martyn Waghorn and Jack Marriott, as well as loan stars such as Fikayo Tomori, Mason Mount and Harry Wilson.
Derby fell at the final hurdle, losing 2-1 to Aston Villa, with Lampard having a similar record to the previous manager Gary Rowett, who had 26 wins from 60 games with a worse squad than Lampard.
With Hodgson, you know that safety would be a certainty, but with Lampard, you don't know what you will get, especially with a low amount of experience in the game as a coach.
When Graham Potter left Swansea City, very few would have predicted that Cooper would've had the impact that he has had so far at the Liberty Stadium.
The Swans have reached the playoffs in both seasons, losing to Brentford last season in the semi-finals. This time, they face a Barnsley side who are considered a shock appearance in the playoffs this season.
Andre Ayew's goal is the difference so far, with the second leg commencing on Saturday at 6:30 pm. Cooper has shown that he is a manager that likes punching above his weight.
This is what Palace need for next season, and he is slowly emerging as the favourite to take over Hodgson, but would only be likely to move to South London if Swansea fail to gain promotion via the playoffs.
It's not a far-fetched shout considering Dyche has been rumoured to be interested in the Palace job in the past, and recent rumours state that he hasn't denied that he isn't in the running.
Dyche will relish a new challenge at Palace, and Burnley look set for a change, but Dyche could prove to be costly with the Clarets asking for £10m in compensation for his services.
However, it is equally likely that his deal will be extended, and with their thin squad, Burnley wouldn't want to gamble on another manager to sort these issues out. Dyche looks likely to remain at Burnley, but it wouldn't be too much of a surprise if he took a new challenge.
Howe is also reportedly emerging as a candidate to replace Hodgson as the next manager of Crystal Palace. Howe has held talks with Scottish giants Celtic, but there has been no confirmation as to who will be the next Celtic manager.
Howe is among the bookies favourite for the Palace job, but the Daily Record report that he is not in the race to replace Hodgson and remains a consideration for Celtic with a deal close to being done.
Looking at his reign at AFC Bournemouth, Howe did a remarkable job, being appointed in the 2008/09 season, where the Cherries were seven points from safety in League Two.
Howe kept them up and got them promoted in his first full season in charge in the 2009/10 campaign. The following season, he left for Burnley but returned in October 2012 to when they were 21st in League One.
An incredible run from the foot of the table secured automatic promotion in 2nd place at the end of the 2012/13 season, achieving the clubs highest ever finish in 10th the following season in the Championship.
In the 2014/15 season, the club won the Championship title and secured their first-ever promotion to the top-flight, where they would stay until the 2019/20 campaign.
Howe remains out of work since leaving Bournemouth by mutual consent after their relegation last season. Howe is good at rebuilding and most certainly knows how to bring the shock factor, playing to the underdog status and achieving amazing feats in his coaching career.
His attacking style of play could be risky in terms of the defensive side, but his track record is very good, and considering his years of success, it would be foolish to rule him out just yet.
Frank's tenure at Brentford speaks for itself. Like Cooper, he has secured two successive seasons in the playoffs, boosting the squad with the likes of Ivan Toney, who has broken the record for most goals scored in a Championship season (31), previously belonging to former Palace striker Glenn Murray (30).
Despite losing key players last season in Ollie Watkins and Said Benrahma, Frank has shown that he can rebuild teams, and he could be the man to fix Palace's summer of uncertainty with lots of player out of a contract or with uncertain futures.
His style of play will also attract the approval of Palace fans who have bemoaned the current style of play. Brentford's attractive attacking football full of goals is likely to win the hearts of Eagles fans, and that could be enough to take them forward as well as improving their defensive side.
Again like Cooper, he is another manager that could only be signed if their team fails to gain promotion as both managers would relish the chance to rebuild their sides into established top-flight teams.