Cahill has been sidelined by injury over recent weeks and takes the place of James Tomkins, who will feature on the bench this afternoon. Cheikhou Kouyate fills the gap left by the injured Mamadou Sakho.
Elsewhere, Wayne Hennessey starts in goal and Brandon Pierrick, Connor Wickham and Jordan Ayew lead the line up-front.
Pierrick is one of five Development prospects to earn a place in the squad to face the Rams, joining centre-back Sam Woods, centre-midfielder Nya Kirby, attacking midfielder Gio McGregor and forward James Daly. It is worth noting Daly can also feature at left-back.
This is the first senior squad McGregor has been named in for a competitive fixture.
Wilfried Zaha, who Hodgson revealed was carrying a knock last Wednesday against Norwich City, is not named in the 18-man squad. Victor Camarasa is also absent, having sustained a calf strain during the week which has been scanned this weekend.
Derby hand recent signing Wayne Rooney a start after he captained the Rams to a 2-1 victory over Barnsley, former Palace man Chris Martin leads the line up-front and former Spurs midfielder Tom Huddlestone also receives a start.
Palace: Hennessey, Riedewald, Cahill, Kouyate, Kelly, Meyer, Milivojevic, McCarthy, Ayew, Wickham, Pierrick.
Subs: Henderson, Woods, Tomkins, McArthur, Kirby, McGregor, Daly.
Derby: Roos, Forsyth, Lawrence, Davies, Bogle, Sibley, Rooney, Huddlestone, Malone, Whittaker, Martin.
Subs: Wisdom, Waghorn, Jozefzoon, Holmes, Knight, Bird, Ravas.
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