Crystal Palace have appointed Iain Moody as their sporting director as part of plans to improve significantly the Premier League club's infrastructure and address the weaknesses in player recruitment that have contributed to their dismal start to the season.

Moody, who was controversially sacked as Cardiff City's head of recruitment at the start of last month, will take up his role with immediate effect and one of his first tasks will be to assist with the process of bringing in a new manager to take charge of a team that sits bottom of the table. Palace have been looking to fill that vacancy since Ian Holloway left by mutual consent on 23 October on the back of a poor run of a results and a chaotic summer during which 16 players were signed, including five on deadline day alone. They currently sit bottom of the table, with only three points on the board, and have suffered seven successive defeats. Steve Parish, Palace's co-chairman, said that he hopes to name a replacement for Holloway by the middle of next week.

Moody will be involved in that process and work closely with the new manager. "We're very happy with Iain Moody," Parish said. "I met him and was very impressed with him. He'll work directly with me and the new manager when he's appointed. Iain is someone whose opinion we'll ask about getting the new manager. We want to appoint someone quickly but we must get the right person. We want someone who will take this club forward over the next three to five years. We're down to three or four possibilities, and we would hope to get something in place for Tuesday and Wednesday next week, though it might go on a little longer."

One of the key reasons behind Moody's appointment is his extensive knowledge of the transfer market, which is an area where Palace struggled in the summer. "I think the whole area of our recruitment is essential at a football club. Iain's got great experience, working with Malky Mackay at Watford and latterly Cardiff, with great success as well," Parish said. "Iain will be responsible for all areas of player recruitment. The chief scout will report into him."

Moody's return to football comes less than a month after he was dismissed from his position at Cardiff in circumstances that have never been explained by the club or its Malaysian owner, Vincent Tan. The situation became more bizarre when it emerged that Moody had been replaced by Alisher Apsalyamov, a 23-year-old Kazakh who was painting and decorating at the club earlier in the summer and has no previous experience of working in football. In another farcical twist, Apsalyamov has since been forced to temporarily stand down from his position because of issues with his work permit.

The whole episode has been hard for Mackay, the Cardiff manager, to accept because of the contribution that Moody made during his two and a half years with the Welsh club. Moody, who followed Mackay from Watford in 2011, was responsible for transfer strategy at Cardiff, as well as handling all negotiations, and he had an impressive track record when it came to identifying players. Mackay described Moody as "a class act" and said that "our loss will be someone's huge gain".

Moody, who speaks fluent French, Italian and Spanish, said that he is looking forward to the challenge ahead at Palace. "I am very excited by the opportunity I have been offered and would like to thank the club for their faith in me. The club has made impressive progress since 2010 and I look forward to playing my part in helping ensure their continued success. I can't wait to get started."