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Neil Danns, Darren Ambrose and Alassane N'Diaye also got on the scoresheet for the Eagles as they enjoyed their biggest win of the campaign, with Blackpool's consolation coming from Alex Baptiste.
A slip from Rob Edwards gave Lee the chance to pick his spot with the Palace opener as he met a Danny Butterfield cross from the right.
Seasiders striker Brett Ormerod should have done better in the 12th minute as he was afforded time and space in the box, but his shot was blocked by Julian Speroni, who raced off his line to narrow the angle.
Sean Scannell thudded a low drive against the base of the post after chesting down Lee's flick-on, before Palace did extend their lead on 31 minutes, Danns powering Shaun Derry's delivery beyond keeper Paul Rachubka.
The visitors started the second half in positive mood and Speroni made a superb reaction save to keep out substitute Ben Burgess' header from just yards out.
But moments later Ian Holloway's side did reduce the arrears, defender Baptiste glancing in David Vaughan's cross on 53 minutes.
Neil Eardley let fly from the edge of the box, but his full-blooded strike drifted wide of Speroni's left-hand post.
But Palace killed off their opponent's resistance with a third goal, totally against the run of play.
Johannes Ertl lifted the ball over the Blackpool backline and Ambrose's shot clipped off Rachubka and over the line.
Ertl's close-range header was blocked by the Rachubka in the 73rd minute, before Speroni tipped Billy Clarke's shot from the edge of the box over the bar.
Two substitutes combined for Palace's fourth goal of the afternoon. N'Diaye's header found Lee Hills on the left and his low cross was tucked away neatly from five yards out by the French midfielder.