The Magpies have struggled in the Premier League and are still facing a relegation fight in the closing months of the campaign.
But the Europa League offers Newcastle a chance of silverware and their last 32 tie with Metalist Kharkiv is locked at 0-0 ahead of the trip to the Ukraine.
The arrival of January recruits such as Moussa Sissoko, Yoan Gouffran and Mapou Yanga-Mbiwa have strengthened Pardew's squad and he feels they are genuine contenders for the Europa crown.
"There's a possibility that this could still be a great season," the 51-year-old said.
"If I look at my best team, I would feel confident putting my best team up against any team left in this competition.
"I've not really had that opportunity. We are a lot stronger now. Therefore if we get through this tie, we have as good a chance as anyone else."
Pardew feels that a string of injuries ruined Newcastle's hopes of replicating last season's strong league form which resulted in a fifth placed finish.
"We have been disrupted this year with a lot of our key players missing," he said.
"Probably this is as strong as I have been with players that I have available. I feel we are a lot stronger than the league position suggests.
"We had a lot of things go our way last year to finish in fifth place, but it was an excellent momentum that we had gained.
"We became a side that was resilient - we haven't got that resilience this year.
"But there is a renewed belief in the squad from the introduction of the new players, particularly [Moussa] Sissoko, [Yoan] Gouffran and Mapou [Yanga-Mbiwa], who will play tomorrow.
"Therefore, our season will be determined by two things: firstly, progression in this competition and secondly, our Premier League position, which I think we can improve dramatically - hopefully."
Hatem Ben Arfa has returned to training after a 10 week absence with a hamstring injury, but the winger is unlikely to feature in Sunday's crucial clash with fellow strugglers Southampton.
"Sunday might be too early for him too, but certainly Swansea, I would be
looking for him to have some sort of cameo role from the bench if he progresses well," he said.