The Gunners - who brought in Sweden midfielder Kim Kallstrom on loan from Spartak Moscow during what was a low-key transfer deadline day at London Colney - are aiming to go back to the top of the table when they tackle Palace, as Manchester City are not in action until Monday night against Chelsea.
When Pulis took charge at Selhurst Park at the end of November, the south London club looked set for an uphill struggle to retain their top-flight status.
However, five league wins have propelled the Eagles out of the bottom three, and after beating Hull in midweek they are 14th, four points clear of trouble, while Pulis was also busy bringing in reinforcements as the transfer deadline ticked down.
And Wenger has been impressed by the impact of the former Stoke boss.
"He has done a marvellous job," said the Arsenal manager, whose team were held to a 2-2 draw at Southampton on Tuesday.
"I must honestly say when he took that job, I thought 'my friend, you take an impossible job there', but he has turned it around and deserves a lot of credit for that."
Wenger continued: "They have a stronger belief certainly, they have more defensive stability and their results and the way they play - I saw them playing against Tottenham - they were absolutely impressive in that game, so that is a good warning for us."
Despite pundits suggesting free-scoring City will now march on towards the title, Wenger insists Arsenal can still have their say.
"We are one point behind Man City, we have 15 games to make a difference with them," Wenger said.
"I believe we have our chances and what is even more important is we are fully committed to play our chances with full belief. I am convinced we can do it."
After Palace, Arsenal head into a run of fixtures which could well go a long way to defining the outcome of what has so far been a campaign full of promise.
First up is a trip to Liverpool for Saturday's lunchtime kick-off, then hosting Manchester United ahead of the FA Cup fifth-round showdown with the Reds at the Emirates Stadium on February 15, which is swiftly followed by the smaller matter of a Champions League showdown with Bayern Munich.
Centre-half Per Mertesacker believes the Gunners can meet those challenges head on.
"February could be the season-defining month with a lot of crucial games coming up," the German international told Arsenal Player.
"[We have] big clashes against Liverpool in the FA Cup, against Bayern Munich and big games in the Premier League.
"So February is going to be the crucial month of this season in defining how we do."
Arsenal must do without combative midfielder Mathieu Flamini on Sunday as he starts the first of a three-match suspension following his sending-off at Southampton.
Wales international Aaron Ramsey will be out for up to six weeks after suffering a setback in his recovery from a thigh injury, but Jack Wilshere is expected to be fit from an ankle problem to face Liverpool.