Following a run of three games unbeaten in the league, Pearson's men have slumped to successive defeats against Stoke City and Manchester United, leaving them three points adrift of safety at the bottom of the table.
The Midlands club have just two home league victories to their name since ending a 10-year absence from the top tier. And Pearson knows that statistic will have to change if Leicester are to stay in the division.
"Crystal Palace are a good side," Pearson said."[Palace manager] Alan Pardew has had a positive return and they have some great attacking options. A very capable side.
"Our home form has to improve, no doubt. It's probably gone unnoticed because we've generally played well. I'm confident we can change it.
"Where we are in May is most important, but progress in the table would be nice. It's an incentive to know three points can get us out."
Leicester were busy in the January transfer window, signing goalkeeper Mark Schwarzer on a free from Chelsea while also bringing in Croatian forward Andrej Kramaric and recruiting defender Robert Huth on loan from Stoke City.
But Palace were even more active, making seven signings including Yaya Sanogo, Shola Ameobi, Jordon Mutch, Pape Souare and Lee Chung-yong.
The London club also made Wilfried Zaha's loan deal from Manchester United permanent and, with his resources substantially bolstered, Pardew is eager to increase the six-point gap between Palace and Leicester.
"They're a tough team, they've done some business in January," Pardew said.
"All the teams down the bottom can see the finish line is not that far away so points are very important.
"It's a game where we can put great distance between us and them. On the same token for them, it brings them really, really tight to us if they win. It's a crucial game in respect of that.
"There is not a feeling we are safe and I won't let that manifest itself. I think the team has good experience and ability, we potentially could finish mid-table if everything fell into place.
"I think we know we have a big battle on our hands as no one is falling away in the Premier League this year, so everybody and every game will be competitive.
"We have to make sure we are too."
Mile Jedinak is back from Australia's successful Asian Cup campaign but will not feature for Palace due to an ankle problem. Winger Yannick Bolasie is still on Africa Cup of Nations duty.
Marouane Chamakh misses out with a broken nose, while Jerome Thomas and Jonathan Williams may also be unavailable due to knocks.
Huth serves the final match of a two-game ban for Leicester, but Riyad Mahrez is back from the AFCON. Goalkeeper Kasper Schmeichel (foot) and striker Chris Wood (ankle) are doubts.
