The Magpies suffered a significant setback in their attempt to secure a top-four Barclays Premier League finish when they were trounced 4-0 at Wigan on Saturday.
However, they head into their trip to Chelsea on Wednesday still sitting in fifth place, level on points with Tottenham, who beat Blackburn 2-0, and one better off than Roberto di Matteo's men following their 6-1 demolition of QPR.
Pardew said: "Although we are a point above Chelsea, we are certainly the outsiders. But Wednesday night is a key night, I think.
"Tottenham have to go to Bolton and we play Chelsea and it might be just down to two after that - but then again, it might not be, so we will have to wait and see.
"I just think you have to put it into the perspective of the season we have had.
"To be, with three games to go and regardless of what fixtures they are, a point above Chelsea and level with Spurs is just outstanding.
"We would have settled for that at the start of the season, for sure."
The respective preparations of the two clubs for the showdown could hardly have been more different, with the Magpies finding themselves 4-0 down by half-time at the DW Stadium against a resurgent Wigan, while 24 hours later, Chelsea headed for the dressing room at the break leading their neighbours by the same scoreline.
Pardew admitted his team had simply not been good enough, but having issued a frank assessment of his players' efforts at the weekend, he is expecting an immediate response.
He said: "If we have had a bad 45 minutes, we apologise to our fans for that and our critics.
"There were reasons for that. We have covered a few of those today [Monday] and a few more tomorrow [Tuesday].
"But the bottom line is we have still got three games and all to play for.
"We are absolutely delighted, really, and we will go to Chelsea and give it our best shot."
Newcastle have not endured too many bad days to date this season - they conceded four at Norwich and five at Fulham before responding to a 5-0 drubbing at Tottenham on February 11 by embarking upon a nine-game run which included just one defeat and a sequence of six successive victories, which only came to an end at Wigan.
Pardew said: "It happens. Manchester United were beaten 6-1 at home. We haven't managed that feat, so if the greatest team can do that, we can do it."
Full-back Danny Simpson is battling a slight ankle knock as he attempts to maintain his record of starting every game this season, although Pardew has also been boosted by the return to fitness of midfielders Gabriel Obertan and Sylvain Marveaux.
Obertan has been out since March with an ankle problem, while summer signing Marveaux has not played since suffering a groin injury in November, but both will travel with the squad.
Sammy Ameobi, the younger brother of Shola, has also returned to training after recovering from a knee injury sustained on reserve team duty in January, although he is still working his way back to match fitness.