The ex-England boss has had a distinguished career in football and managed to save the Eagles after a disastrous start to this campaign under Frank de Boer, leading them 11th in the Premier League table.
He will be given the honour, which recognises his contribution to Croydon and to football, both home and abroad.
Council leader Tony Newman said: “I’m delighted to be recommending Roy for Freedom of the Borough as he represents all that is great about Croydon. Born and raised here, he’s had a remarkable international career in football, and to cap it all he’s now the manager and saviour of Crystal Palace.